HMRC announce new powers to check business records – be prepared

With Her Majesty’s Revenue & Customs (HMRC) recently launched campaign to encourage small businesses to keep proper business records, Lutterworth accountancy practice Howell & Co is urging  all local businesses with less than £500,000 turnover or less than 10 employees to take heed and counter what could be an intrusive, if not devastating ‘spot check’.

With ‘spot checks’ by officials from HMRC flagged as beginning this month, having been trialled in selected areas previously, Rob Howell, director Howell & Co recommends small business owners use the opportunity to ‘clean up their act’ and if in doubt speak to their accountant in order to ensure this essential but sometimes neglected element of running a small business is up to date and up to speed.

Rob commented: “Although we appreciate that it’s helpful for HMRC to launch a campaign to improve small business’ record keeping, the proposed ‘spot checks’ can be daunting, especially as HMRC  can levy fines of up to £3,000 where they find that proper records have not been kept.”

He added, “Given the current economic client, it is also likely that HMRC will use the campaign to investigate an organisation’s records to identify any underpayment of tax and if there has been poor record keeping then it will be very difficult for the taxpayer to contest any assessments made by HMRC.”

Reiterating that small business owners need to keep records which provide evidence to support their tax returns, specifically proof of income and expenditure, Rob highlighted that the type of records required will depend upon what is appropriate for the size and nature of the business. This will vary widely from business to business but should almost certainly include:

  • A cash book of payments and receipts
  • A petty cash book
  • Sales invoice day book/copy invoices
  • Purchase invoice day book/supplier invoices
  • Wages records
  • Till receipts/electronic records of sales
  • Records of cash receipts
  • Bank statements, cheque book stubs, paying in books
  • Bank reconciliation
  • Stock records
  • Hire purchase/lease details
  • Details of personal drawings/cash introduced

“If a business manager is in any doubt or needs clarification they should seek the advice of a qualified accountant, who will recommend what would be considered appropriate systems for the size of the business. It could prove a wise investment in the long run,” Concluded Rob.

Practice appoints local consultancy to support next phase of development

One of Lutterworth’s most dynamic, professional accountancy practices Howell & Co, has appointed local PR and marketing consultancy, AVA PR Ltd to help support the business as it launches the next phase of its development.

Established in 2008 by Rob Howell, who has over 25 years experience in industry and in practice, Howell & Co had already carved a niche for itself as a hands-on, no-nonsense practice, providing practical support and business advice to a range of companies in Leicestershire, including those involved in manufacturing, engineering, computer software, recruitment and catering.

Rob became aware of AVA PR, which recently relocated to the town from Leicester, through a number of high-profile business events and media opportunities co-ordinated by the consultancy and decided to call the team in to see how they might be able to help improve Howell & Co’s profile.

Rob commented: “Howell & Co has an excellent reputation within our own client base but we need to grow and develop the business beyond that.  I am acutely aware that we are good at what we specialise in, accountancy and book-keeping but we are not marketeers – so I applied the same principle of business to the appointment of AVA PR; let the experts in their field do what they do best.”

Michelle Tayton of AVA PR was only too happy to help: “Businesses like Howell & Co are exactly the type of client profile AVA PR relishes. Enlightened professionals like Rob who know what their business needs in terms of PR but don’t know how to go about upgrading their website or getting involved in social media activity; or where to start with corporate profiling or in-house publications, and these are just some of the areas we are specialist in. Like Howell & Co, our clients can utilise as much or as little of our services as they need, and once we become involved with a business it tends to become a long term relationship as we continue to support their business development and they in turn support ours.”

AVA PR has initially been appointed to work with Howell & Co on their social media profile and developing a direct mail campaign to complement this first phase.