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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: business records checks: overview: what are business records checks?

Business Records Checks (BRC) are targeted compliance checks set within a wider framework of education and leverage. They are in-year checks that do not focus on tax specific matters, but test the adequacy of the statutory business records. BRC are designed to help improve record-keeping in Small & Medium Enterprises (SME) and lead to more accurate tax returns. This in turn will help to close the tax gap.

BRC aim to positively influence customer behaviour through both deterrent and prevention activity. The change in the customer behaviour will be brought about by:

  • direct involvement in a BRC
  • wider knowledge that BRC exist (gained through word of mouth or other publicity) and/or
  • leverage, in the form of advice and encouragement from agents and other intermediary bodies who can talk to customers about HMRC’s BRC work.

BRC are designed to help us to identify customers who are

  • aware of their record-keeping obligations but need some help to get it right
  • aware of their record-keeping obligations but ignore what needs to be done
  • unaware of their record-keeping obligations.

There are a number of options available to our customers who need some help with their record-keeping needs. The level of business record check will vary depending on our view of the needs of the customer. Visits are targeted at those who are most likely to be unaware of their obligations or have failed to take reasonable care with their record-keeping obligations.

See Legislative background to the checks (Word 39KB) for detail of the legal authority for BRC. This is in law at Schedule 36 to Finance Act 2008.