HMRC has announced the suspension of its small business record-inspection programme, following sustained criticism from industry bodies.
The Revenue had originally planned to scrutinise the tax returns of up to 20,000 small firms, in a bid to clamp down on sloppy book-keeping across the country.
The nationwide round of spot-checks began with a pilot run last April, based on 2,437 business. More than one in four companies visited during the pilot stage were found to have been lax in their record-keeping.
However, the Federation of Small Businesses recently came out in strong opposition to the checks, with chairman John Walker claiming they were inimical to the government’s campaign against red tape.
In response to such criticism, the HMRC has promised a rethink of its strategy.
Richard Summersgill, the Revenue’s director of local compliance, said: “After reviewing the pilot programme and listening to the views of businesses and representative bodies, we acknowledge the need for a fresh approach to business records checks.”
HMRC has yet to confirm when, or if, the programme will resume. Further details will be posted on growingbusiness.co.uk as soon as they break.