Business Records Check phone call - What are the questions?

The much-criticised Business Records Check system is back.

From November 2012, thousands of small business owners and self-employed people across the UK started to receive letters informing them that their business had been selected for a check, the purpose of which is to ensure that they are complying with statutory recordkeeping obligations. The letters can be concerning, particularly for those who have not had direct contact with the taxman aside from registering their business.

Not all those who receive a letter will ultimately receive a visit. The first stage of the process is a phone interview. The letter will give a date by which HMRC will call. Alternatively, you can phone them earlier. The interview will last around 15 minutes and, based on the answers you give, you will then receive a decision regarding whether or not you have been selected for a visit.

HMRC do not provide details of the interview in advance. However, from a series of reports from taxpayers and agents it has been possible to put together a list of questions that you are likely to be asked. It is important to understand that there does seem to be some variation in the questioning, and that this may therefore not be a comprehensive list. Similarly, the wording of the questions may be slightly different. You should also note that HMRC will not ask you about matters specific to your own tax return during this interview; rather, the purpose is to determine whether or not you are keeping satisfactory records.

Business Records Check - the phone interview questions

1. On a scale of one to nine, where one is ‘not at all’ and nine means ‘completely’, to what extent do you understand your obligations to HMRC?

  1. On a scale of one to nine, where one means ‘never’ and nine means ‘always’, to what extent do you need help understanding HMRC forms?
  2. How long have you been in business?
  3. How many business payments do you take in a month?
  4. Of those, how many are in cash?
  5. How often do you write up your business payments?
  6. How many business purchases do you make in a month?
  7. Of those, how many are in cash?
  8. How often do you write up your business purchases?
  9. Can you tell from your record keeping which transactions are for business purposes and which are personal?

What happens next?

Immediately after you finish the interview the HMRC representative will tell you whether you have been selected for a visit. Alternatively they might give you details of further ‘education’ courses or, finally, there might be no further action.

If you are selected for a visit, you may wish to consider seeking professional advice.

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