HMRC is to launch a controversial pilot compliance exercise this month based on its consultation paper 'Modernising Powers, Deterrents and Safeguards'.
Taxpayers should be prepared for some unusual letters from HMRC, who say that agents will also be copied in. HMRC is looking to streamline the enquiry process, and wants to try out some of the ideas set out in Annex B of the consultation document.
Some of the ideas are extremely controversial. They include:
Current business record keeping review
# This is perhaps the most controversial; the intervention may be highly invasive, and would take the form of checking record keeping procedures rather than a full enquiry - aimed primarily at small businesses and sole traders. For example, concentrated on cash trades. The review would focus on checks on cash, sales, drawings and wages.
This proposal is likely to be of particular benefit to HMRC in supporting joint interventions for direct and indirect taxes.
See full Press Release.
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