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The Institute of Directors have issued a warning to all businesses to ensure business records and accounts are up to date following a crackdown on tax evasion by HM Revenue & Customs. In a bid to collect all tax owed HMRC may schedule investigations to ensure records are correct and up to date.

A business will be given seven days’ notice of an intended tax inspection, which could result in any company who doesn’t have accurate accounts being charged penalties on unpaid taxes which are outstanding. Relevant documents should also be made available for HMRC which can be filed online so that all records are easily located. Complete records of trading are essential for a tax inspection, as are organised and up to date records of financial transactions. Online accounting is a simple method which allows records to be filed in real time rather than posting records infrequently.

With online accounts HMRC will be able to obtain an accurate picture of your business and be assured of compliance with relevant legislation.

It is possible for the company accountant to be present at an investigation which is launched by HMRC, but this is rarely necessary with online accountancy as all records are up to date and organised.
Online accounting also allows your self-assessment tax return to be based on accurate up to date information rather than estimates from previous years. This will ensure you pay the correct amount of tax rather than receiving an unexpected underpayment of tax at the year end.

About The Author

Gary Fields

Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.

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