There are many benefits to having a bookkeeper/management accountant, not least of all making sure that you are reducing your yearly tax bill to HMRC by claiming back all legitimate expenses, and removing the worry of filing your return at the end of a tax year.
But even more importantly than that, is the fact that beginning in the second half of 2011, the focus of HMRC for tax purposes is going to be the small business.
HMRC believe that SMEs fail to keep significant records or appropriate analysis of accounts, and that a new scheme to investigate 50,000 small and medium sized businesses in 2011 is now called for.
Further investigation will take place in 2012-2013, equating to a total investigation of some 40% of the total business sector (circa 5 million).
The checks intend to focus on a businesses records for the previous 6 years, are expected to take around half a day and will include thorough examination of items such as bank statements, cheque stubs, paying in books etc, leading to fines of up to £3,000 for unpaid tax.
So is now the time to think about employing a bookkeeper/management accountant and making sure that your records are up to date and in order?
Remember, there are many other benefits to consider including;
- You will know every month what your total profit/loss looks like
- You will get a written report explaining what all the numbers mean, analysed to suit your particular business
- You will have a better awareness of financial management (i.e. debtor and creditor analysis)
- You will understand at all times what your tax liability is
- You will be sure that only legitimate allowable expenses are offset against the business for tax purposes every month
- You will not have the huge cost of an accountant at the end of the year – whose costs per hour to sort out a years invoices and receipts are high
- You will pay on a monthly basis to have your accounts kept in order, thus spreading the cost
- You can see which parts of the business are doing particularly well and which need more focus from the analysis – leading to improved chances of business success
- As stated above – HMRC are focusing on small businesses over the next few years, and having a good bookkeeper is becoming a must!!