HMRC Business Records Checks
05 May 11
When running a business, there are many demands on your time, not least from the taxman. The threat from the taxman has increased again as HM Revenue and Customs has begun a new set of investigations known as Business Records checks. 200,000 companies (40% of all SMEs) are to be targeted over the next four years.
These checks have been designed to investigate whether adequate records are being kept. Businesses are expected by law to ensure that all records relating to Tax, VAT, PAYE, Capital Gains Tax and so on are kept for six years, and are properly filed.
Examples of inadequate records include:
• Untidy and unanalysed records such as a box full of invoices, bank statements and cheque stubs not supported by an analysis book
• Analysis books not completed regularly (within four weeks of the event)
• Cash books not written up in date order (indicating that books may have been created from bank statements)
• Significant unanalysed and un-vouched round sums
The direct result of a failure to keep proper records is that the tax being paid may be incorrect. If a business is found not to be keeping proper records they could be fined – up to £3,000 in some cases.
Using the right accounting software solution will help protect your business from any HMRC investigation – both now and in the future. The software can quickly enable you to keep proper records, and give you transparency over all of your financial transactions. Importantly, the right accounting software package will allow you to drill down to transaction level and undertake quick management reporting exercises, as required by company directors or external parties.
Cornerstone can help you to select and implement the right accounting software system for your business. Alternatively, we can help you get more from your existing accounting software, to ensure you are meeting your legal obligations as a business. To book a free of charge consultation please call Ben Cooper on 0845 600 2008 or email firstname.lastname@example.org.