HMRC Lacking Carrot Plenty of Stick

In a Nutshell

Contractor limited companies record keeping

In a Sentence

Penalties for businesses that are not keeping their records in an HMRC defined satisfactory state.

HMRC fire another shot across the bows of the smaller business; "Businesses are legally required to keep certain business records...there are penalties for failing to keep proper records...."

Targeting Small Businesses

HMRC need to collect more tax. Forget the banking sector who often channel earnings offshore, it's the smaller companies that HMRC is focusing on to reduce unpaid tax.

The Forum of Private Business point out that the initiative comes even though HMRC promised a ‘lighter touch' attitude to bookkeeping in light of various tax changes.

£3,000 Worth of Stick

Visit HMRC's website spin it by promoting of a high level of record keeping in order to minimise the risk of tax overpayment. If sufficient evidence of income and outgoings cannot be shown, mistakes are more likely to occur.
Demonstrating poor bookkeeping will carry a punishment of £3,000.

"The businesses will benefit from improved financial management which in turn will boost their chances of survival. Those seen to be fulfilling their obligations will likely have a lower chance of a subsequent compliance intervention from the taxman."

It has never been so important for contractors running their own limited company to get themselves a reliable and effective specialist contractor accountant.

In the absence of a personal recommendation you could do a lot worse than take notice of the feedback given by clients of the UK's top contractor accountants. Check out the chart of UK contractor accountancy firms.