HMRC are planning a levy of up to £3,000 for small businesses who do not keep their business records in proper order. When it was reported in the Telegraph, online, it received many comments from small business owners including comments such as:

If they were competent and they discovered that 40% of businesses had problems keeping records they might conclude the tax system was too complex and should be simplified.

If this campaign is successful and as a result 5 million small businesses make less money because they are spending time on administration rather than productive work and incurring additional expense to pay accountants then small business profit and tax to government will fall.

There may be less beans but all the beans will be properly counted and labelled and that is what is important in the parallel universe inhabited by civil servants and accountants.

Source:  Telegraph Online – small-businesses-for-record-keeping-failures

Well, we would all agree a business needs to keep records.  Do we agree on that? Conducting business in an organised way makes sense, surely it must do? If we put aside any lack of HMRC customer relationship skills, is it not the case that the real issues are more

1. HOW TO keep records and
2. HOW MUCH will it cost.

For business administration, it is best to employ a qualified bookkeeper. They work fast, and pay for themselves. For £50 a month they can handle most that a small business can throw at them, including PAYE and VAT.

Using QuickBooks or another reputable accounting software package is normally a good idea. A business associate of mine recently purchased, for £50 on eBay, the US version of QuickBooks 2010 which can be used for £sterling (there is a setting within the software, I believe.)

Regarding HMRC, its administration and politics. All I can say is that any UK Administration that wants power to wished to stay in power needs to hear the voices of the “business estranged many” i.e. self employed business people and business owners throughout the UK, who are crying out for a well managed civil (civil service) HMRC.

HMRC are giving small business owners and their professional advisers the chance to contribute via a consultation process  HMRC Business Record Checks – Consultation Document