 Business records check u-turn is good news for SMEs
3 February 2012: PKF Accountants & business advisers has welcomed HM Revenue & Customs’ (HMRC) plans to shelve its Business Records Check initiative. The firm has previously criticised the scheme for causing business owners unnecessary hassle without delivering any meaningful benefits to the Treasury.
John Cassidy, tax investigation and dispute resolution partner at PKF, says:
"The Business Records Check scheme was fundamentally flawed and has taken up a lot of everyone’s time for little discernible benefit. One of the most significant concerns that advisers raised from the outset was the definition of ‘adequate records’ – HMRC should have started consulting on this back in 2010 before the scheme launched. This was a major issue for business owners because it gave tax inspectors the authority to impose immediate record-keeping penalties on companies that were identified as having ‘seriously inadequate records’ for the current year – even though HMRC would not be able to prove at the time that their future tax returns would be wrong.
“Visits from tax inspectors tend to worry even the most scrupulous business owners. With little to be gained from such visits under the records check initiative, it is encouraging to see that HMRC has taken the sensible and pragmatic decision to look for a ‘fresh approach’.
"In the meantime, I’m sure that the staff employed in this team could be put to good use elsewhere within HMRC. For example, Treasury statistics show that 70% of VAT penalty review cases result in the penalty being cancelled, suggesting that HMRC should spend more time analysing its own internal records, procedures and decision making.”
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For further information, please contact: Andy Konieczko, 020 7065 0537, andrew.konieczko@uk.pkf.com
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Notes to Editors:
1. PKF (UK) LLP is a leading firm of accountants and business advisers with more than 1,500 partners and staff operating in 23 offices in the UK mainland firm, incorporating a wholly-owned financial planning company and associated offshore practices. The firm specialises in advising growing and entrepreneurial/owner-managed businesses, AIM and fully listed companies, and also has extensive experience in the public and not-for-profit sectors. Principal services include assurance and advisory; taxation; consultancy; corporate recovery and insolvency; corporate finance and forensic. The firm has particular expertise in advising sectors such as hotels and leisure; mining and resource; public sector; real estate and construction; professional practices; not-for-profit; and medical. The firm’s web site is www.pkf.co.uk
2. PKF (UK) LLP also offers financial services through its FSA authorised company, PKF Financial Planning Limited. PKF (Isle of Man) LLC is a limited liability company registered in the Isle of Man. PKF (Channel Islands) Limited is incorporated in Guernsey.
3. PKF (UK) LLP is a member firm of the PKF International Limited (PKFI) network of legally independent member firms. The PKFI member firms have around 2,200 partners and more than 21,000 staff in around 125 countries.
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