Taxman's visits set to cost £560

PROPOSALS by the taxman to visit small companies to carry out spot checks on their record-keeping could cost businesses an average of £560 each, according to the Institute of Chartered Accountants of Scotland (Icas)

Under the plans, HM Revenue & Customs (HMRC) would visit 50,000 companies a year for the next four years to assess the way records are kept and their accuracy.

It estimates that each visit - averaging half a day - would cost a business 54.

But in its response to a formal consultation on the plans, Icas said it believed that when disruption and the time of business advisers was taken into account the true cost could be more than ten times that figure.

Ian Dewar, convenor of Icas's small business tax sub-committee, said: "HMRC should be looking for positive ways of encouraging taxpayers to maintain adequate records rather than adopting a big-stick approach that we believe will cost owner managers a lot of resource that could have been better directed towards growing their businesses.

"Those embarking on new business ventures are forced to battle from the outset against a mass of government regulations and red tape."

Icas believes that if checks are to be carried out, HMRC should not impose any penalties on a first visit to a company and instead provide practical advice on record-keeping.