Small firms should check their books are in order – that’s the warning from HM Revenue & Customs (HMRC) after it announced it is extending the crackdown on poor record-keeping nationwide.
HMRC’s Business Record Checks programme was piloted in eight cities across the UK earlier this year – from which the tax body has discovered that 44 per cent of businesses had issues with their records and 12 per cent had seriously inadequate ones.
An additional 12,000 business record checks are now due to be carried out before the end of the year, before the programme is rolled out nationwide in 2012. Small businesses not keeping tax records up to date risk paying a penalty of up to £3,000.
“Good record-keeping helps businesses pay the right amount of tax at the right time, thereby potentially avoiding interest and penalties,” said HMRC director of local compliance Richard Summersgill. “Adequate records give businesses a clear idea of their trading position and profitability, allowing them to make business decisions and adjustments to ensure survival and success.”