Startup Revolution

HMRC is to suspend the controversial spot checks on small businesses.There's some good news from the taxman for a change with the announcement that, following complaints from professional and business bodies, HM Revenue & Customs (HMRC) has pulled the plug on the controversial scheme in which small companies are subject to spot checks and fines of up to £3,000 for poor paperwork.

A review of the Business Record Checks pilot programme showed that it had not only been badly targeted but damaged HMRC's relationship with accountants and business groups. There were also concerns that while HMRC was targetting small businesses they were, at the same time, turning a blind eye to large companies.

The checks had already been scaled back from 50,000 to 20,000 visits a year, but the continuing strength of feeling against the scheme proved too strong and HMRC will take a new look at the programme.

Chartered Institute of Taxatrion president Anthony Thomas, welcomed the recommendations saying, "Tax advisers are strongly supportive of efforts to improve record keeping by business, but up until now HMRC have been going about it the wrong way, endeavouring to eradicate error by increasing burdens disproportionate. A good programme to improve business record keeping will involve HMRC and tax advisers working together to educate business about good practice and support them in improving their systems, as well as warning about the risks of poor record-keeping."

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Image: Robert Cochrane / FreeDigitalPhotos.net

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