Note that HMRC's Business Records Checks programme ceased in 2015, so this information is retained for historical and academic interest only.
In December 2010 HMRC issued a consultative document1 setting out its plans to carry out 50,000 cross-tax compliance check visits a year into SME businesses, looking at current year (pre-return) business records, with a view to warning those with weaknesses in record keeping; and issuing penalties to those with no records/significant failure, based on existing legislation. HMRC's assumption was that poor record keeping led to loss of tax and that an estimated 40% of small businesses had poor records, and it estimated that the programme would raise £600m over four years.
In early 2011, HMRC began a pilot programme of pre-return Business Record Checks (BRC), designed to check whether the records of small businesses were adequate, given the nature and size of the business, to enable a complete and correct tax return to be made and to give advice where it felt that there was scope for improvement. HMRC made it clear that
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