Keeping accurate financial records is a crucial part of running a company. Indeed, this is one of the reasons why employees attend payroll courses and Sage courses. However, the importance of this task may rise even further if plans announced by HM Revenue and Customs (HMRC) go ahead.
The organisation, which collects and administers all direct and indirect taxes, as well as serving a number of other functions, intends to take on new powers that would allow it to conduct spot checks on company records. If the firms in question fail to meet the necessary criteria, they could face fines of £3,000.Recently, a consultation on the subject came to an end and, if the ideas get the go-ahead, they will come into force later this year.
However, the proposals have met opposition from some industry groups. For example, the Federation of Small Businesses (FSB) has claimed that the changes would represent a revenue raising exercise. It cited figures suggesting that up to £600 million might be raised by the alterations over the next four years.The organisation also mentioned concerns about what criteria would be used to assess each enterprise and said HMRC has not yet specified how companies would be chosen.
Commenting on the idea, FSB economic, tax and finance committee chairman Roger Bibby said: “FSB research has shown that one in ten small firms spends more than six hours per week fulfilling their tax responsibilities. However, many small businesses do not have a dedicated finance or accounting department and will be unaware of the intricate details of tax obligations – especially when starting out.”
He added that rather than introducing a system of punishments, HMRC should move to a system whereby small enterprises are encouraged to improve their record keeping.Some firms may opt to send more of their staff on payroll courses and Sage courses so they are better equipped to deal with record keeping issues.