Business records checks, which could involve checks on drivers’ mileage claims, are being re-launched by HM Revenue and Customs (HMRC).

The substantially redesigned business records checks programme now involves a new step-by-step approach, with a much greater emphasis on education and support, says HMRC.

Businesses need to keep records which can clearly demonstrate they are meeting their tax responsibilities.

HMRC will be sending letters to businesses it believes may be at risk of keeping inadequate records, advising them it will be phoning them to discuss the issue.

This call will then take the customer through a set of questions to assess the customer’s record-keeping affairs.

Depending on the outcome of this conversation, HMRC will then determine whether the customer could benefit from tailored educational support and whether a business records checks visit is necessary.

Where a visit reveals the customer is keeping inadequate records, HMRC will provide guidance on what the customer needs to do to improve their record keeping.

HMRC will then arrange a follow up visit, normally three months later, giving the business a reasonable time to make the necessary improvements to their record-keeping processes.

If, on the second visit, the records have not improved to an adequate standard, then HMRC may charge a penalty.

The business records checks programme will be rolled-out, region by region, over a 14-week period. The planned timetable for visits to re-commence is as follows:

• London & Anglia – 26 November 2012
• South East England – 14 January 2013
• Scotland – 14 January 2013
• Northern Ireland – 14 January 2013
• Central England – 21 January 2013
• East of England – 28 January 2013
• North Wales & the North West of England – 28 January 2013
• South Wales & the South West of England – 4 February 2013

HMRC’s director of local compliance Richard Summersgill said: “We’ve listened to businesses and agents, and revamped our business records checks programme to make it more streamlined, targeted and better focused on education.

“The visits offer benefits for businesses at risk of keeping inadequate records. Adequate records help businesses pay the right amount of tax at the right time, thereby avoiding interest and penalties for errors and late payment, whilst also giving HMRC greater assurance when a business submits its tax returns.”

The HMRC programme is aimed at SMEs but Paul Jackson, managing director of TMC, said company car operators remain under close scrutiny from the Revenue because mileage is a known area of weakness

“The issue at stake is whether firms check their drivers’ mileage claims adequately,” said Jackson.

“Overpaying is tantamount to providing private fuel and carries a big liability for tax and National Insurance.

“Company records need to show sufficient detail about business journeys. That means recording the date and purpose of every trip, the start and finish points and accurate mileage.

“HMRC will also look for evidence of regular checks on the accuracy of claimed mileages to prevent overpayments.”

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