Following the news that HMRC is examining small businesses to reclaim £34bn in tax that it was unable to collect in 2015-2016, it how now been revealed that around 10% of UK are under investigation.

Here at Lima Accountancy, we provide expert help and advice to individuals and companies facing tax-related issues, and were therefore extremely interested in this development.

HMRC will carry out a compliance check on either a self-assessment, corporation tax return or VAT returns if they have reason to suspect something is not right. In knowing this, having a week-kept bookkeeping system will help to iron out these issues if they do come to review you or your organisation.

If HMRC does decide to review your records, this is commonly done by a phone call that usually takes around 15 minutes. During this time, business owners can expect to be asked a number of questions to ensure that their business is meeting legal requirements.

The next step – if HMRC deems it necessary – might be a face-to-face visit, which usually takes around two hours. Depending on the outcome of these compliancy checks (or business record checks), a company may face penalties or fines.

Make sure you keep any invoices for purchases made by your business, including things like receipts and bank records. One of the most fundamental practices we advise all companies implement is keeping is a thorough and organised record of their books. If you ever need to prove that your financial history is legally complicit, for instance, then your records and bookkeeping will offer receipt of this.

Good bookkeeping is an important and useful tool when dealing with taxation and HMRC, but it also has more benefits in terms of running your business smoothly and managing cashflow. It can, however, be a time-consuming and complicated task that can often be more practical and cost-effective to outsource.

Based in Leeds, Lima Accountancy provide a range of accountancy taxation services to organisations in the Yorkshire area. For more information, please feel free to call a member of our team today on 0113 844 0402.