Small and medium-sized businesses in North East Wales have been warned to get ready for a major blitz by the Taxman.
The Inland Revenue has revealed they are going to get tough with businesses that don’t keep their books properly.
They have announced they are going to be spot-checking the accounts of 50,000 SMEs every year for the next four years.
Fines of up to £3,000 will be imposed on firms whose books are not up to scratch.
The new initiative comes into force later this year but the announcement by the Inland Revenue went largely unheralded.
As a result, it’s feared that a lot of SMEs could be caught out by the clampdown.
Helen Mort from the Wrexham and Saltney based book-keeping specialists, Business Essentials, said: “They are going to look at the books and records of 50,000 Small and Medium Enterprises each year for the next four years.
“They are hoping to be able see whether their accounts are of the standard at which they should be maintained.
“If not, they will then be looking at issuing penalties and they are planning to raise £600 million over the four year span of the clampdown.
“The maximum levy they can impose on people is £3,000 and if you do the numbers that equates to them penalising all the 50,000 companies they check with the maximum fine.
“The rules have always been there but before now they have never used this as a targeted area for income generation.
“This is a serious clampdown and it emphasises that people must keep proper books and records. That is the law and the Inland Revenue have realised this is an area they can attack.”
Her colleague, Lisa Hinze, added: “The Inland Revenue is not looking to introduce this until the second half of this year so there are a few months to get things in order.
“Now is the time to get things sorted – there’s no point waiting until the Taxman knocks on your door.
“People tend to think that buying in a book-keeping service is going to cost them more than it actually does. In reality, it could terms it could end up saving them money.
“People who run their own business are not always aware of the best way of keeping their records – or aware of the items you should or should not be claiming for.
“As well as looking after their books, we can give people training to give them a step in the right direction. You can cherry pick what we do so that we provide a bespoke service.
Business Essentials is based at the offices of Chartered Accountants Coxeys in Wrexham and Saltney.
Director Anthony Lewis said: “The problem for a lot of SMEs is that they cannot afford to have a full time finance department.
“Not only that, they are better off doing what they are good at and creating money.
“We always advocate that people, if they can, should employ a professional book-keeper.
“There are things that people who run SMEs could miss out on claiming and if they are running VAT registered businesses it’s even harder to know what the rules are.
“Now is the time to get your house and your books in order because if you’re found wanting in terms of your book-keeping you can face a stiff financial penalty.
“I am sure there must be many SMEs who haven’t got a clue that this clampdown is heading in their direction.
“The Inland Revenue is not obliged to write to every self-employed person or SME and warn them. It is their responsibility to ensure that their accounts are in order.”
