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Businesses warned of new HMRC powers

North East businesses are being warned about HM Revenue and Customs’ new powers, which come into effect from 1 April 2009.

Schedule 36 of the Finance Act 2008 is set to extend existing information powers and introduces a new power for HMRC to be able to inspect business premises and records relevant to all direct taxes - not just PAYE and VAT as current powers allow. Inspections may also take place at short notice of seven calendar days, or no notice in special cases.

John Richards, tax partner at North East accountants and business advisors RMT, said: “The changes coming into place in April give HMRC the authority to request ‘information’ or an explanation, in addition to documents. HMRC can also inspect business premises, business assets and business documents on the premises. The inspection powers are of particular concern as taxpayers or the staff left in charge when the business owner is absent may unwittingly agree to an inspection at no notice - without their tax advisor being present.

“Businesses should be aware that the power to inspect business premises does not include the power to force entry, although if the inspection is either by an authorised officer or pre-approved, taxpayers may face a penalty of £300 plus £60 per day for refusing HMRC access.

“If you are contacted by HMRC for a business inspection, it is essential to seek immediate professional advice. This is a significant change, likely to lead to increased business premises inspections and it is essential that businesses are prepared.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .