Why the setback?
The taxman’s ambitious schedule of business record checks (BRCs) has been postponed to the next tax year, which will be welcome news for dental practices.
But why the setback, and what will the taxman’s next move be?
The BRCs were announced at the beginning of 2011, whereby inspectors would make visits to randomly selected businesses to assess the quality of their record keeping. At first, there were to be 50,000 inspections, but soon this was cut by more than half to 20,000 and in the end the project was shelved after a mere 2,437 visits.
Facts and figures
Statistics for the completed BRCs have been published with businesses checked receiving a ‘green’, ‘amber’ or ‘red’ rating, depending on the quality of their records. 61% were ‘green’ because of their adequate or better record keeping; 28% were ‘amber’ as there were some issues to be dealt with; and 11% were considered ‘red’ and ordered to improve or risk a maximum fine of £3,000.
Given the potential for fee gathering, the taxman’s decision to postpone the remaining checks was a little unexpected. But in fact it was driven by a heated response from the accountancy profession as a whole, who have vigorously fought against the programme.
Their dispute lies in the potential for businesses to be vulnerable to inspectors exploiting the checks by ‘fishing’ for soft targets. In addition to this, they strongly oppose the taxman’s criteria for identifying inadequate records.
Accountancy groups will probably be invited to talks in order to set specifications to evaluate standards of record keeping, and put an end to the opposition. The end result is expected to be a positive one, so that when the BRCs finally re-emerge, there won’t be any nasty surprises.
As yet, no date has been set for the BRCs relaunch. However, following such a comprehensive review, new guidelines will undoubtedly be released. These measures are anticipated to explain exactly what constitutes proper business record keeping, ideally with a range of examples to illustrate best practice.
The best advice would be for practice principals to keep a look out for the return of the BRCs and read all of the support materials as soon as they are issued. Preparation is key for keeping on top of your record keeping, passing checks with flying colours and evading expensive fines.
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