One of the 2008 Budget announcements which did not draw much press comment was confirmation that the tax authorities were to ‘press ahead’ with reforms to the compliance regime - in other words, increasing their powers to ‘check up’ on taxpayers.
What will this mean to you?
The new powers are intended to be extensive. Perhaps of primary concern to the taxpayer, businesses and individuals alike, are HMC&R’s proposed increased powers to ‘inspect’ whatever records they want – perhaps even without prior notice (ie just walk in) where they deem it necessary. Forget about your ‘rights’!
What it means is that in future, not only will you need to keep proper records but, your records will need to be kept ‘up to date’ too.
For many of the larger businesses this may not represent a problem, but for the bulk of smaller and medium sized businesses in the UK it will mean a radical change in behavior.
The way forward!
But, as proactive and forward looking accountants, we always like to seek out the positives too. And, truly, there is a real ‘upside’ benefit in this one - for you!
And, fortunately, this upside benefit is especially relevant in the current economic turmoil.
What’s the benefit?
The benefit is that, because your records will be now up to date, your trading performance can be monitored on a regular basis!
And that’s got to be good news for you - and good news for us.
It’s good news for you, because you will know exactly where you stand financially and performance wise at any moment in time – enabling you to undertake any remedial activity in a timely manner.
And it’s good news for us, because we can, using the same information, provide you with your own ‘in-house’ monitoring systems to help you improve efficiency, increase profits, generate positive cash flow, and more – and of course provide you with timely advice and planning for saving you tax.
So, yes, indirectly it is actually turning out to be a genuine favour the Revenue are doing for the business community.
Gone will be the dark days of not knowing how you are performing – now you will have, at your finger-tips, the information needed to enable you to run an even more profitable and successful business.
So, what to do next?
For HM Revenue & Customs purposes,
- if you have a comprehensive accounting system and it is being maintained regularly, then you are already compliant with this proposed regulation.
- if you have a comprehensive accounting system, BUT it is not being maintained regularly, then you need to put in place the routines necessary to ensure it is maintained regularly.
- if you do not have a comprehensive accounting system, then you need to consider seriously your next step. And might I suggest that you take a moment to give us a call to discuss the way forward.
What’s the upside?
As mentioned, there’s more to this than simply meeting the Revenue’s compliance requirements - it’s got to be much more about seizing this opportunity to make your business ‘tick’.
And to this end, there are a number of initiatives that we’ve been looking at over the past year to help you and our other clients through these troubling economic times –
- One is to make available a ‘monitoring’ system – a digital dashboard effectively – so you can check up, on a regular basis, that you are on track for a profitable year.
- And secondly, to resolve the issue of regular and reliable accounting data .
And we have an answer for you to both of these.
That’s right, we can help you with the ‘digital dashboard’, for which you will need to call us, and we can show you a cost effective and secure way of keeping regular and reliable accounting data (click here for more info).