MSB Accounting Limited

Typical questions cover:

The nature of your business such as the type of work you do, how you find work, how it is billed, what payment forms you accept, where these are banked and by whom and an estimate of the company's average monthly turnover.

The business owner/accountant relationshipincluding what records and supporting documents were provided to the accountant, when these records are provided and then whether any advice was then received from the accountant.

Whether estimated figures are included in the year-end accounts.

Whether accounts are checked before they are signed off and entered onto the company (or self assessment) tax return.

The operation of PAYE and VAT at your company such as details of staff roles and salaries, how often they are remunerated, PAYE scheme reference details, how VAT is charged and recorded, if separate VAT records are kept.

Documents checked typically include:

Business records covering the three months prior to the date of the visit, including the last VAT return. Ensure these records are easily accessible and split between income and expenditure. The officers will check the audit trail of money being billed and received alongside money being charged and paid out:

Income - sales invoices, business bank account statements, paying in books.
Make sure they are consecutively and clearly numbered, describe the work undertaken, show the VAT registration number.

Expenditure - expense receipts, business cheque book stubs, business credit card statements and PAYE and VAT records.There may be particular focus on dual purpose expenditure such as mileage and telephone costs.

Online information - make sure all content, including your company website and LinkedIn profile, is an accurate reflection of your business activities.

Timescales:
BRC officers will require a minimum of two hours for their visit but it can take as long as five so make sure you allow adequate time.

Following the visit, the BRC officers will issue a letter to confirm whether or not your records are adequate. If they are inadequate then you will also receive a list of recommended improvements. In this instance, you will then receive a follow-up visit, typically three months after the initial visit during which the officers will check the changes have been implemented.

Initially, you will only receive a penalty in the most extreme cases of poor record keeping. In the longer term, however, penalties of up to £3,000 will be issued for serious inadequacies in record keeping. HMRC will issue guidance on this, and make a further announcement on when it will happen. For more information on your record keeping speak to us or visit the HMRC website
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