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Check your records carefully

Small and medium-sized businesses across Shropshire have been warned to make sure their records are up-to-date or face the threat of legal action.

The warning comes from Helen Thomas, Managing Director, at Dyke Yaxley Chartered Accountants, in Shrewsbury.

"HM Revenue and Customs is planning a concentrated programme of checks on SMEs to see how adequte and accurate their records are.

"This means all businesses in this sector should double check the records they keep to ensure they meet the requirements because if they fail, a significant fine could follow."

Helen said the checks would cover invoices, receipts and deductions, as well as other financal information that should have been updated regularly.

"Whether you work for yourself or you run a small business employing other people, good record-keeping has many benefits - if your records are up-to-date, it makes filling in your tax return easier and could help you to avoid paying too much tax.

"Keeping track of your income and expenses will also help you budget for any tax you owe, and it could also help reduce your accountant's fees as well-organised records will save them time too.

"A lean and organised system will also give you the information you need to manage your business and help it grow."

Helen said SMEs must keep invoices and receipts to show what they had bought or sold relating to their business, and if they employ other people, they must keep records of their wages and the tax and National Insurance that has been deducted.

"You will also need to show clearly what you have spent personally and what you have spent on your business.

"If you use cash, you need to keep the till receipts and use a record book to keep track of it all, and if you use part of your home for business you should keep copies of utility bills so you can work out the amount you spend in relation to your business.

"So don't get caught out - reorganise your business records now before HMRC knock on your door."

Helen Thomas, Dyke Yaxley's Managing Director