The taxman is determined to crack down on businesses that don’t keep adequate business records, and cash-based businesses are considered the highest risk.

There’s a new inspection regime. It starts with a letter from the taxman telling you to expect a phone call. You can step out of the process by referring the caller to us. You shouldn’t get a black mark for doing so: the taxman is required to deal with us as your tax agents if asked.

If you take the call, you’ll be asked questions from a computer-generated script, which only accepts a limited range of answers. For example: How many purchases are in cash? Answers accepted: none, a third, half or more.

The answers you give determine whether the taxman regards you as posing a low or a high risk of having inadequate records for filing accurate returns. HMRC may then send you guidance on how to keep better business records, or an inspector to look for what you might be doing wrong. If the taxman wants to inspect your records, please ask us to be present for that visit.

If you ‘fail’ the inspection you will be told how they think you should improve, and you’ll get another visit in 3 months to check whether you have acted on the taxman’s advice. A second failure will result in a fine.