Now and again HMRC gives with one hand and takes away with the other. Apparently if you’re a contractor working under a Limited company, you’re at less risk of a home visit by HMRC and more likely to get advice instead. HMRC have changed their Business Record Checks (BRC) system, and life is set to be a little less scary for anyone working as a Limited company.
Promoting accurate tax and VAT records
November 4th 2013 was the date on which BRC activities all over the country will be piloting a new scheme designed to ensure accurate records are kept and tax returns are properly completed. If you’re based in Edinburgh, Leeds, Glasgow, Stockport or Bradford, you’ll be part of the pilot. In other areas the way BRC works remains the same… for now.
The revenue insists it hasn’t given any contractors penalties for poor record-keeping yet, but the new system has led to noticeable improvements in businesses where follow-up visits have been necessary.
HMRC are also investigating fresh risk procedures, looking at the cost implications of implementing the new scheme and making sure everything is consistent across the board. And tax officials are working closely with tax agents to establish sensible benchmarks for best practice in record-keeping, which might ultimately provoke changes in company administration practices. Watch this space!
Huge new penalties for VAT evasion fill HMRC coffers
At the same time, today’s hefty new penalties for big business VAT evaders have boosted HMRC’s coffers by a whopping 18%, as HM Revenue and Customs reportedly gathered a record-breaking £1.44 billion as a result of its investigations into VAT avoidance by big businesses through 2012. And long may it continue. It seems terribly unfair for small businesses to be penalised while big, often non-UK-based businesses seem to get away with tax and VAT murder.