Keep proper records or face £3k fine, says FPB

Date: 14th January 2011

Small businesses operating in the UK have been warned that failing to keep proper financial records could see them fined by HM Revenue & Customs (HMRC).

This could encourage a number of small business owners to seek the advice of a specialist accountancy service to make sure all their affairs are in order.

The Forum of Private Business (FPB) has warned that despite promising a "lighter touch" approach to mistakes in bookkeeping amid the 2.5 per cent VAT rise, small firms now face the risk of a £3,000 fine for what is being described by HMRC as "significant record-keeping failures".

Matt Holmes, the Forum's accountancy adviser, said: "HMRC is planning to clamp down on small businesses tax payments and record keeping from the middle of 2011.

"Obviously entrepreneurs will want to make sure they are not caught out and hit in the pocket at a time they can least afford it, but the key is to focus on creating business intelligence that you can use to your benefit, rather than just keeping records for the tax man because you have to."

Posted by Emily Smith