Taxman targets 50,000 small firms in record keeping clampdown
HM Revenue and Customs (HMRC) intends to investigate 50,000 small and medium sized companies in 2011 for failing to keep proper records and underpaying tax.
The 'business records checks' campaign will target the 40% of all 4.9m businesses that HMRC said suffered from poor record keeping and where unpaid tax was likely to be due.
The department will use its existing powers to tackle 50,000 of the worst cases each year from the second half of this year, with penalties imposed for significant record keeping failures.
The programme will target businesses with a turnover of less than €50m and fewer than 250 employees, and will typically be pre-return checks, taking half a day on average to complete. HMRC expects the programme to raise £600m of extra revenue over the next four years.
The programme has been discussed in outline with the Compliance Reform Forum which includes representatives of the CIOT, ICAEW, ACCA, among other professional bodies.
The consultation document was published on 17 December and the closing date for comments is 28 February.