The taxman is still struggling to determine what constitutes adequate paperwork for a business or self-employed individual to comply with the Business Records Checks programme.
It is now believed that HMRC is to introduce a pre-screening process into the checking programme in a bid to make it look less heavy-handed. 60% of all the businesses that have been visited so far do pass muster, but by screening in advance, either by phone or letter, the compliance rate should improve.
HMRC expects 40% of businesses would pass the pre-screening process and therefore not have to undergo a visit from a Business Record Checks inspector.
However, members of the Administrative Burdens Advisory Board say the 40% target is too high. John Whiting, the tax policy director at the CIOT, said the current review of the BRC programme was promising because it gives HMRC the opportunity to define clearly exactly what it believes constitutes adequate records. The Revenue should in fact have done that by April.
HMRC was also recommended to get on with communicating exactly what was happening with the programme since it had been suspended and also to clarify the progress being made on the educational aspects of business record checking.
One would have thought that the first stage in setting up such a process would have been to clearly define what does and what does not comply. It seems a back to front way of doing things to set the compliance requirements once the scheme is already up and running!
