In a cross compliance check part of the process is to visit your business premises so the Revenue can look at records of the business or the assets and find out more about how the business actually operates. The actual operation of the business can lead the Taxman to ask more questions, eg. What is the first point when an order is placed? And generally speaking this process or record keeping would be looked on as being a “prime” record of the business. Also, often business owners who have recorded this information transfer it to various other processes and put it into an alternative format or computer software to pass to their accountants. When the Taxman has had his walk and identifies what the first source of making a “sale” is, he will look on that as being the “prime” records of the business. He will ask if this prime record either manual or computerised is passed to your accountant on which the ac counts are based. All too often these prime records have not been retained eg. till rolls, orders passed to factories manufacturing units for the order to be made up. It is essential when the Taxman comes to call that you are well rehearsed with your accountant and you can identify what records you have available and what prime records you may have retained. The Taxman has set in stone that the business records and particularly the “prime” records should be kept for at least 6 years.

 

It is not really possible to put off one of these visits, if the Taxman thinks a visit is necessary and you do not agree he can ask an independent tribunal who deals with tax matters to approve his request and therefore make a visit compulsory. If you refuse there could be penalties involved and we really don’t want to go down that route if we can be well rehearsed and well informed.

 

The essence of the story is please ensure that all records of the business are retained. Discuss the record keeping with your accountant. Discuss any records that you feel do not form part of the preparation of the accounts. Find out if the Revenue would look on these as prime records. Be prepared, be well rehearsed and above all be planned and speak to your accountant prior to the visit.

For further information please contact Betty Glancey on 0141 643 9200