My client has been in business for many years and tax returns are filed in good time. He has not been investigated nor has he had an enquiry. His records keeping on spreadsheets supported by invoices, etc are really good. He has just received a letter from the Revenue headed BUSINESS RECORDS CHECK. It states, every year we carry out a number of Business Records Checks to make sure that businesses are keeping adquate records. And "ta dah" you been selected. It went on to say having a good record-keeping system helps a business to fill in its tax returns. So the aim of this Business Records Check is to establish wether your business is keeping statutory records that are adequate for the purpose of completing its tax returns. It went on to explain that statutory records are the records that tax laws say a business must keep. They are the records needed to enable complete and accurate returns to be made. The type of records need will vary from business to business.
The letter also stated that the Revenue would like to ask some questions in a phone call that should last about 15 minutes or the client can ring the Revenue. It further sates that at the end of the phone call the Revenue will have enough information to enable them to decide whether they need to visit the client to check that the statutory records are adequate. However, if they dont need to visit, they may instead ask their Business Education Support Team to contact the client to offer help so that the client can improve their record-keeping if necessary.
This is the first time I have seen such a letter from the Revenue which my client received direct from HMRC. Has any other accountants out there seen one of these. My question is, is this one of those imfamous Revenue fishing trip and how would an accountant respond to HMRC