Compliance checks - new regime

April sees the introduction of a new and unified code for enquiries, visits and inspections.  The new rules will apply to income tax, corporation tax, capital gains tax, VAT, PAYE and CIS.

The new system will involve new HMRC powers of inspection for business records and premises, the ability to inspect "in-year" records and a statutory requirement for HMRC to act reasonably in the conduct of checks. 

With the new rules being introduced at the same time as the new penalty regime, businesses and their advisers are going to have a lot with which to contend over the next couple of years whilst the new regime settles down.  In particular, anecdotal evidence suggests the large numbers of the Revenue's own staff are not yet trained in these new rules and professional advisers will need to be alert to the possible need to rein in some of the Revenue's more aggressively enthusiastic officers. 

The new compliance rules are to be found in FA 2008, Schedule 36 (inspection), Schedule 37 (record-keeping) and Schedule 39 (time limits).  (For those wondering what happened to Schedule 38, that concerns the unrelated matter of the disclosure of tax avoidance schemes.)

An introductory HMRC podcast can be downloaded here.  There is also an "e-learning" facility provided by the Revenue, which, even by the Revenue's typically poor standards of information delivery, represents an embarrasingly inept use of modern technology.