You may, or may not, have heard of HMRC’s business record checks. These were introduced in 2011 with the view of helping businesses identify their shortcomings in their bookkeeping. However, these came under fire from the accountancy and taxation professions as it was seen as a backdoor way for HMRC to start investigations. To make matters worse it also became clear that officers were inadequately trained to carry out these checks.
On 20 October 2015 HMRC announced that it was scrapping these checks. The reason given was that they weren’t cost effective and didn’t identify as many problems as was expected. But don’t think this means you don’t have to keep good records as you can still be fined up to £3,000 if HMRC consider that your tax records aren’t up to scratch. Also, it is advisable to make sure that you have good bookkeeping as this can save you tax and keep you out of trouble with HMRC.