It sounds like you run your business effectively and honestly, so even if HM Revenue & Customs (HMRC) did pay you a visit, you should have little to worry about.
Having said that, being prudent and diligent can do no harm and there are some tips for business owners in the industries being targeted that can help to strengthen their position with HMRC:
- Keep copies of old price list/ menus, to help support fluctuations in your sales figures
- If you launch any offers or host any events, keep copies of them to show HMRC why your sales might have increased during the offer period- but why your margins might have fallen
- Operating in the hospitality industry, your business will be at the mercy of the weather. So if there is particularly bad weather, make a note of it in the bookings diary to show HMRC why trade dipped
- Similarly, if there are special events like the Jubilee or Prince William’s wedding, make a note of those too to show why sales might have been boosted
- And you should also make a note of when the school and bank holidays are, as again, you are likely to see an increase in sales
- If you inject any money into the business, always keep detailed paperwork on it; showing where the cash came from
- If you receive some cash personally, always keep detailed paperwork on it. Not only will this help when you come to establish whether it is taxable or not, but it will also show HMRC why your drawings might have reduced
Staff issues and problems with suppliers may also play a part in fluctuations in sales, but you should have evidence of these in your payroll or invoices.
If you would like to discuss this further, please feel free to contact your local TaxAssist Accountant.
By Jo Nockels
Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.