Retailers are being reminded to keep proper records of their daily cash takings or face the wrath of the taxman.
Accountant Bally Ark, whose Birmingham-based firm Ark Aurora specialises in the retail sector, warned retailers they had to keep their tax affairs in good order, especially in the light of plans by HM Revenue and Customs (HMRC) to target up to 20,000 small firms this year with spot checks on their paperwork.
Failure by retailers to keep EPoS reports and “Z-reads” of cash takings at the end of the day were the two omissions most likely to lead to an investigation by HMRC, Ark warned, and could lead to fines of up to £3,000. “I certainly recommend you keep some sort of recording system of how much cash has been taken,” he said.
HMRC officials intend to inspect up to 20,000 firms to see if they have adequate proof of expenses and income dating back years in a new drive set to begin in April.
The move was condemned earlier this month by Conservative MP Priti Patel as “the persecution of small businesses”.
Meanwhile, the Tax Tribunal has slammed HMRC for unlawfully using late-payment penalties against thousands of small businesses as a “cash-generating scheme”. It waits four months before alerting firms who have not filed their tax returns on time, which ups the fine from £100 to £500.
