Here at 1^st Contact Tax we have been providing small and local businesses with up-to-date advice on what measures they can take to ensure that they are completely compliant when dealing with the HMRC (Her Majesty’s Revenue and Customs). We appreciate that this is not the best time for small businesses at present, what with the current financial crisis, so the very last thing any small business owner needs now is to incur penalties for failing to adhere to the strict rules that are enforced through the HMRC. 

Never more so has this issue been so relevant. Especially when you consider the fact that the HMRC are now getting themselves ready to enforce new compliance check rules from the 1^st April 2009. The main purpose for having introduced these new rules is to attempt to consolidate the overall activities of the HMRC.  

Previously, income tax and VAT were split between two organisations, but the HMRC assumed responsibility for these and other areas of tax. The new rules coming into force are a further step toward making UK tax issues easier for all people to understand and the intention is to ensure that there is just one amenable organisation to deal with.  

It is imperative that you familiarise yourself with the new rules that will be introduced on the 1^st April 2009. For the most part, these are primarily concerned with accurate company accounting. If you are concerned about this, you are best advised to seek the services of a qualified accountant, who will be able to run through these rules in more detail and ensure that your company is remaining compliant at all times. This is an area where 1^st Contact Tax will be ready and happy to help. We are able to assist with any accounting enquiries. 

Whilst this does all sound rather one sided so far, the HMRC have stressed that they also need to improve their game and make dealing with them a far easier and more pleasant experience. They are keen to see that a new ‘code of practice’ is set in place to correspond with the introduction of these rules and they have promised to provide far more support to those tax payers that are prompt and accurate with their relevant payments. However, they also insist that they will be better placed to come down even more heavily on those that don’t.  

Within this particular code of practice will be a 4 point safeguard. This aims to guarantee the following: 

1. Proportionality 

Are the actions being taken by staff of the HMRC proportionate to the issue that requires address? 

2. Reasonable 

Are the actions and decisions being made reasonable? 

3. Clarity 

Do all tax payers clearly understand what they are expected to do? Is this information set out for them in terms which are easy to understand? 

4. Consistency 

Are the actions which are taken by the HMRC the same as when they are dealing with other individuals in relation to the same issues? 

So, as we can see, the HMRC are also going to be making every effort to turn the new rules into working practices that should help to ensure easier dealings on both sides. As a small business owner you must always make sure that your accounting is completely accurate. You should be in a position whereby you would be able to explain any entry swiftly. By taking reasonable care with your company’s accounting, this will undoubtedly make for sound business decisions.  

The HMRC have stated that they should have the full information which pertains to the issues discussed in this article available on their website by the 31^st March 2009. A little late, we’re sure you will agree, especially when you consider the fact that the rules come into place the very next day.  

In the meantime, it is advisable not to leave things until the last minute. 1^st Contact Tax is on hand to provide you with accounting advice and support. Do get in touch with us today and we’ll run through all relevant issues together.