HMRC has started pilot business record checks in 8 locations (Edinburgh, Irvine, Manchester, Liverpool, Stockport, Sunderland, Sheffield and Portsmouth) running until 15 July.

It is expect that up to 1,200 Business Record Check (BRC) visits will be undertaken by the 30 HMRC staff assigned to the pilot.

HMRC has clarified that the BRC initiative does not insist on a specified format for business records, but checks whether the records of all business income and outgoings are recorded in a way appropriate for the size and nature of the trade.

HMRC has also stated that it does not intend to charge any penalties for record keeping failures during the current phase of testing and continues to review its long-term planning around the introduction of such a charge in the future.

At some point during 2011 it is expected that the BRC visits will become standard practice and penalties are likely for poorly kept records. More information is expected after the initial pilot.

HMRC have issued free tools to help you get your business records in order. The four new products are suitable for the self employed, sole traders and small businesses. Also you can contact us as we can help you review your records.

Keeping records for business – what you need to know: a basic guide with a helpful list of where to get more information.

A general guide to keeping records for your tax return: detailed guidance on record-keeping covering what type of records you may have to keep, common problems and examples for different types of business.

Set up a basic record-keeping system: with examples of spreadsheets and information about setting up a record-keeping system.

Find out what records you should be keeping: looks at the records you need to keep and assesses how well you are keeping them. If you are thinking of starting business the tool provides you with a checklist. If you are established it will give feedback and advice on improvements you may need to make.