SMEs: Check Records Ahead of HMRC Crackdown
15th January 2011
Small firms should check that their books are in order ahead of a crackdown on those keeping bad tax records, the Association of Chartered Certified Accountants (ACCA) has warned.
HMRC announced the crackdown in a December consultation document, Business Records Checks, which included plans to investigate the records of 50,000 small businesses every year. Firms not keeping tax records up to date risk paying a penalty of up to £3,000.
“HMRC are concerned that record keeping by small businesses has been shoddy, and believe that this will make them keep their records up–to–date all the time,”
said ACCA’s head of taxation, Chas Roy–Chowdhury.
“There’s a lack of understanding at HMRC of how small businesses operate — books and records are often updated some time after the transaction has happened.”
“Firms should get an accountant to make sure everything is set up efficiently and that they are meeting statutory requirements. They can also advise you on what software to use. Spend some money to get that sorted out — it’s tax deductable, so it’s money well spent.”
Roy–Chowdhury also said small-business owners should get into the routine of updating their records weekly.
“Set aside time at the end of the week or in the evening to ensure you meet requirements.”
HMRC spokesman, Jan Marszewski, said:
“If small businesses are struggling to pay their tax bills, there are helplines to ring, information on the HMRC website and they can approach HMRC for a Time to Pay arrangement.”