Published in the Wigan Observer:
HMRC has recently undertaken a pilot business records check. This involves checking the adequacy of small and medium sized enterprises’ business records. The pilot involved around 800 businesses, including many in the North West and it was found that 44% of businesses had “some issues”, whilst 12% were seriously inadequate. The scheme is now to be extended and the number of full time staff employed on the programme increased, with the aim of completing 12,000 checks by March 2012. It is intended that businesses with “problems” will be followed up and if there is no improvement penalties will be applied. But what about the small business that keeps its records in a brown paper bag and hands it over to an accountant at the end of the year? Once the accountant has done his magic the records will pass the HMRC tests, but what if the inspection takes place beforehand? There is nothing wrong with this approach, if you feel able to manage your business finances in this way, so if you’re records are deemed to be inadequate don’t give in without a fight.
Whilst on the subject of business records you might be interested to know that HMRC has recently published details of errors found in last year’s PAYE returns. There were over 500 employees called AN Other, and 128 Mr, Ms, Mrs Dummy and 40 people were aged over 200. No wonder we have a pension crisis! All very amusing, unless of course you received a fine for an inaccurate return.
Finally HMRC is urging new businesses to sign up for a Regional Employer National Insurance Contribution Holiday. The scheme offers reductions in employer national insurance contributions for new businesses (that is businesses that started after 22 June 2010) based in the North West. The first 10 employees taken on during the first year of the business will be employer NI free for up to one year (or up to 5 September 2013 if earlier). The scheme could potentially save a business £50,000.