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HMRC's ‘New Approach’ to Business Records Checks is Coming to Northern Ireland

As part of their ‘new approach’ to business record compliance checks, HMRC officers will be visiting targeted small and medium sized businesses (SMEs) in Northern Ireland to check their records. For these purposes SMEs are businesses with an annual turnover below £30 million who employ less than 250 people.

The visits will be conducted as part of a 14 week UK wide roll out programme preceded by HMRC sending out letters to businesses it believes may be at risk of keeping inadequate records, advising them that they will be in touch by phone. The call will take businesses through a set of questions designed to initially assess record keeping.

Depending on the outcome of that call, HMRC will then decide whether the business would benefit from “tailored educational support” and whether a visit is necessary.

If businesses are keeping inadequate records they will receive guidance on what to do. HMRC will then set up another visit after three months to check that the necessary improvements have been made. Businesses that then fail to comply will be liable to a penalty.

By way of reminder HMRC commenced a pilot programme of Business Records Checks (BRC) in April 2011. Up until 17 February 2012, 3,431 BRC had been carried out. These found that 36% of businesses had some issue with their record-keeping of which 10% had issues serious enough to warrant a follow up visit.

Following a review of the BRC programme, HMRC felt there was clear evidence that the programme was effective in improving record-keeping practices amongst SMEs. However, the review recommended that the checks were better targeted in future, and linked to wider education and support activities.

In order to implement the review's recommendations all new BRC activity was paused from 3 February to 31 October 2012 to allow HMRC to redesign the BRC process.

The new approach to BRC detailed above started on 1 November 2012 with HMRC due to conduct visits in Northern Ireland from 14 January 2013 onwards. It should therefore be stressed that this is not a recommencement of the pilot but a full roll-out of the BRC process.