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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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.
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
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.