Up to 50,000 small businesses could be fined by the taxman for failing to keep proper tax records.
Under a consultation, HMRC is looking to delve into 40% of the 2 million SME’s which, it believes, have poor record keeping and this failure to keep good, accurate records has led to unpaid tax.
Those businesses that are found to have unpaid tax liabilities due to poor record keeping could be fined up to £3000 but as unpaid tax can arise from several different taxes eg Corporation Tax, VAT, PAYE etc each instance could result in fines which would add up to substantial fines for a business.
HMRC’s aim is to improve book-keeping in 40% of the 4.9m SME community where records have been found wanting. By forcing these businesses to improve record keeping advisors will benefit from a reduced admin burden and businesses will benefit from improved financial management which in turn should improve their chances of survival and growth.
Those businesses who are seen to fulfill their record keeping obligations will, almost certainly, have a lower chance of receiving subsequent compliance interventions by HMRC.
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