HMRC intend to check the accounting records of small businesses more frequently. They are to target 50,000 small businesses to ensure that minum standards are being met.
Estmates are that HMRC could be looking to tax over £600 million in direct and indirect tax from UK small businesses.
Fines will be levied of upto £3,000 if tax and accounting records are found not to be up to date and accurate.
The visits will begin in late 2011. This will include checking basic documents, bank and credit card statements, as well as tax returns and accounts to ensure that the owners are keeping a basic level of records.
There are major concerns from small businesses as HMRC have not provided detail of how business accounting and tax records will be check.
Fines could have serious implications on small businesses to the point of putting some out of business completely. Surely HMRC needs to help small businesses understand their tax obligations first.
For many small businesses bookkeeping is low down the priority list, maintaining an income strean in these difficult economic environment is more of a priority.
Outsourcing bookkeeping and accountancy procceses is becoming more popular with small businesses as this takes away the worry, is generally cost effective and should keep the taxman away.
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