The Need for Good Business Records

HMRC ties up with Five Business Show to highlight the need for good record keeping.

Introduction

Keeping good records might not be the most exciting aspect of running a business but, when it comes to growing your business, it is one of the most important. To emphasize this message, HM Revenue & Customs (HMRC) is sponsoring “The Business Inspector,” a four part series airing on Five, which aims to raise awareness among small business of the need for sound business practices such as keeping good records.

The Business Inspector

The series is presented by Hilary Devey, a former C4 Secret Millionaire and chief executive and chairman of palletized freight distribution business The Pall-Ex Group which she built up into a multi-million pound business.

The four-part series sees Devey go into struggling businesses and reveal how improving their business systems, such as keeping good records, managing cashflow and developing a marketing strategy, can help turn around their fortunes. It will be broadcast weekly on Five at 8pm from 17 March 2010.

Stephen Banyard, Business Customer Unit Director at HMRC said:

“Failure to take reasonable care costs the Exchequer over £6bn a year with poor record keeping a major cause. We hope this series will raise awareness of the need for good record keeping.

We also want businesses to realise the benefits to their business – such as improved cash flow – of taking better care of their records and paperwork.“

Top Tips for Keeping Good Records

Keeping good records makes good business sense as it gives you the information you need to manage your business and help it grow. In addition, it makes filling in your tax return easier and quicker and helps you avoid paying too much tax.

Good record-keeping is also a legal requirement. In April 2009, penalties were introduced for not taking reasonable care with records and tax returns.

Here are six tips for good record-keeping:

• Set up a reliable system for keeping full and accurate records of your income and expenses from the outset.
• Keep records throughout the year - update your records regularly, rather than letting the paperwork pile up.
• Keep your records for a minimum of six years.
• Keep records to show what you have bought or sold relating to your business. This should include details of all cash transactions as well as invoices and receipts.
• If you are an employer you must keep records of wages paid and details of tax and National Insurance that you have deducted and paid to HMRC.
• Keep bank statements and building society books – this is particularly important if you don’t have a separate business account. You should be able to show clearly what you have spent personally and on the business.

For more help with record keeping go to Keeping Records: A Quick Guide . To watch a short online video on record keeping visit Business Link Tax Help

Article Added Sunday, 07 March 2010

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