HMRC has started to crack down more heavily on businesses with poor record-keeping
Accountancy firm Baker Tilly has said that HMRC
officers clamping down on UK businesses that keep poor trading records have “little practical accounting experience.”
The “validity of judgement” of these officers may need to be questioned, according to Baker Tilly
, who warned SMEs that the taxman has altered its approach to records checks.
“Initially [HMRC] said it was looking to use the checks to educate taxpayers to improve their records. Many took this as an indication that penalties would be used sparingly. However it is clear HMRC is keen to impose penalties as a deterrent across the small business sector.”
Last December, the taxman announced plans to launch full-scale investigations and fines of up to £3,000 against businesses showing the worst non-compliance. In total, it plans to target 200,000 firms in four years, with receipts from investigations expected to increase tax take by around £600m.
Baker Tilly has urged HMRC to only issue fines in cases with “demonstrably significant” record-keeping failures.
“HMRC is right to attempt to tackle [this] issue. That said, an overriding concern remains as to how penalties will be applied.”
A spokesman for HMRC said: “The officers carrying out the current visits are experienced and have received face-to-face training. They will continue to develop their skills as they gain experience.”