Business records check

Business records check

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I have a client who is a part-time sole trader (turnover around £12k).

She keeps manual records of income and expenditure to a fairly good standard (no separate bank account) and I prepare the year-end accounts and tax return

She has received a business records check notice. What is the best way to approach it? (One earlier poster said that the accountant making the initial call to HMRC results in an automatic visit).

Thanks

Replies (6)

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By ShirleyM
15th Jun 2014 14:42

Not necessarily

We have had a business record check by telephone, for a client where we complete the bookkeeping. It didn't result in a visit.

We also had a client handle a telephone business record check themselves, and they use manual records. No visit for them, either.

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By Alf
15th Jun 2014 18:16

What to expect

Thanks

As this is my first client to have a BRC what questions should be expected and what are the "right" answers?

A course I was on suggested that agreeing that you didn't like filling in forms or saying that records were not written up immediately were grounds for a follow up visit as they are counted as high risk by HMRC!

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By ShirleyM
15th Jun 2014 18:39

That wasn't my experience

We told them our procedure with that particular client. We get the records quarterly, do the bookkeeping & reconciliations, and then do the VAT return. It was my first records check so I was a little wary, but it was quite straightforward and simple ... and it didn't appear that HMRC were out to find fault.

See this previous thread ... it has a list of questions, but not all of the questions were asked.

https://www.accountingweb.co.uk/anyanswers/question/business-records-check-telephone-questions

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By Philip Hoyle
15th Jun 2014 19:00

Make sure you/your client answers honestly

A tax specialist warned me to make absolutely sure that any questions are answered honestly rather than just saying what you think the tax inspector wants to hear.  The reason being that the answers are recorded and that if there was a subsequent more detailed enquiry that discovered a problem, then HMRC would go for full deliberate & concealed penalty referring to the prior "lies" as justification for demanding the highest penalty available.

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By Alf
16th Jun 2014 10:18

Thanks to all

For your advice and experiences

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By Alf
25th Jul 2014 14:36

Update

Just an update, as the BRC has now taken place:

1) The questions were all as predicted here (thank you again) apart from from an additional question as to whether my client has any employees (she doesn't)

2) To clarify, when I asked about "right" answers I was not suggesting telling any lies, I was thinking of questions that my client might not realise were part of the interview eg "do you like filling in forms" in case there were any other similar questions to be aware of

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