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28th January 2021
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Get your business on track with help from new tools
Around 40% of SMEs in the UK - two million businesses - do not keep adequate records, even though they are legally bound to keep them, to make sure they make a correct income tax or corporation tax self assessment return. Failure to take reasonable care in record-keeping leads to a loss of around £6.5billion in tax every year.
Free tools to help SMEs get their business records ship shape were launched this week by HM Revenue & Customs.
The four new products are suitable for the self employed, sole traders and small businesses. They have been produced in advance of the launch of HMRC's new Business Record Checks programme later this year, which will impose penalties for significant record-keeping failures.
"In these tough times, keeping good records makes sound business sense," says Brian Redford, HMRC's Acting Director, Business Customer Unit.
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"It may seem like a challenge, particularly when you're starting out, but keeping good records will bring real advantages to your business. Get a proper system in place and you'll not only be confident that you are paying the right tax, but you'll keep up-to-date with how much you owe suppliers and how much you are owed.
"Later this year, HMRC will start a programme of Business Records Checks that will look at the adequacy and accuracy of business records in SMEs to bring about a major improvement in the standard of record-keeping. Now is the time to invest a bit of effort to make sure your business records are perfect."
There is something for everyone - from basic factsheets to online tools:
* Keeping records for business - what you need to know: a basic guide with a helpful list of where to get more information. www.hmrc.gov.uk
* A general guide to keeping records for your tax return: detailed guidance on record-keeping covering what type of records you may have to keep, common problems and examples for different types of business. www.hmrc.gov.uk
* Set up a basic record-keeping system: with examples of spreadsheets and information about setting up a record-keeping system. www.businesslink.gov.uk
* Find out what records you should be keeping: looks at the records you need to keep and assesses how well you are keeping them. If you are thinking of starting business the tool provides you with a checklist. If you are established it will give feedback and advice on improvements you may need to make. www.businesslink.gov.uk
A public consultation document was published in December 2010, with proposals on how best to implement and carry out the Business Record Checks. Read the plans on Business Records Check at:
www.customs.hmrc.gov.uk
25th February 2011