Wednesday, May 7, 2008

The end of the old paper bag jobs?

The provisions in Schedule 36 and 37 of the Finance Bill 2008 have the potential to revolutionise the way that accountants deal with smaller clients and will increase demand for quality bookkeepers.

Schedule 36 includes, at part 2, new powers for any officer of HMRC to enter into business premises to documents...if such an inspection is 'reasonably required for the purpose of checking the tax position of any person'.

In effect this anticipates the prospect of 'in year' visits for direct taxes in the same way as has long been the norm for VAT and PAYE inspections. Only, in future, these checks may be designed to risk assess the quality of the accounting records DURING THE PERIOD OF ACCOUNT and with the provisions in Sch 37 in mind (see below).

Schedule 37 deal with 'record-keeping' and makes a small but important change to the existing fairly general requirements in s12B TMA 1970. New subsection 3A permits regulations to be introduced to provide:
- for certain specific records to be kept; and
- that those records may have to include specified SUPPORTING DOCUMENTS.

In due course when those regulations and supporting guidance are issued, it surely won't be long before HMRC start using their new powers to make spot checks and 'in year' visits in an effort to ensure that all is as good as it could be.

Once this all becomes commonplace I suspect that the demand for good bookkeepers will grow dramatically.

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