THE HM Revenue and Customs (UK) have released a review of its controversial Business Records Checks project. Launched last year,the project focused on small businesses because the government felt the need to reduce the possible risk of non compliance. Tax inspectors were provided with permission to visit business premises to ensure that proper records have been maintained to support income declarations and expenses claims. The HMRC in the process created unrealistic criteria for small business records and it placed considerable compliance burden on SMEs and their advisers

This process and scheme received criticism and objections were raised that the scheme violated and unfairly penalized small businesses. The objections have forced stall the next phase of the project where 20,000 small businesses were to join the bandwagon of the other companies. The HMRC said that the project would have benefited from more detailed consultation with tax professionals at an earlier stage. In order to mend the mistakes, the HMRC will work with a limited number of companies and will undertake a strategic review of the project in consultation with the professional and representative bodies to find better ways to implement the project.