SMEs will soon receive a phone call from the taxman checking up on their business practices if they do not properly keep their tax records. The HMRC is seeking confirmation that local businesses are able to maintain proper business records for all tax purposes including corporation tax, VAT, National Insurance contributions, and PAYE.
The new alert comes courtesy of Trevor Hayman, a South Coast office tax specialist from Smith & Williamson. The associate tax director explained that HRMC can use a phone call to decide if further action needs to be taken and if a business needs to learn to keep better business records.
Hayman went on to say that investors will look at all of the records for the current year. They want to see that the business keeps accurate business records of everything including invoices, general expenses, petty cash, and receipts.
He went on to say that if there are no problems with the records then the HRMC officer will tell let you know that and then offer proof in writing. On the other hand, any business that does not have proper records will be fined and then have a reasonable amount of time to correct the problem. At this point the HRMC officer will set up a meeting when they can come back to make sure that all of the necessary improvements have been made.
At the time of the follow up visits if the records are kept correctly then the fine will be erased. However if the HRMC finds that the records are still not being kept correctly then the penalty will still apply and will be increased slowly for each additional offence.