Everyone in business knows that keeping books and records for your business is a requirement of doing business in the UK. See Our Guidance on this here.
In the event you don’t keep proper books and records and HMRC are unable to establish your true financial position they do have the right to estimate your income and expenses and determine a tax liability based on this and the onus is on you to prove otherwise.
In one recent case the taxpayer was left with a tax bill of over £200K due to an extraordinary lack of books and records. See the full article here.
This is an extreme case, but we have seen HMRC estimating tax bills that if left undisputed would of cost the clients many thousands of pounds.
Making Tax Digital will be soon upon us and therefore not only will you need to keep property books and records you will need to do so in a digital format. We have outlined how this will affect you in an earlier blog Self Employed-Major changes to the way you report your income tax.
If you are unsure of what records you need to keep or the format in which you need to keep them then get in contact with us and we will be more than happy to help.