Well if recent research is anything to go by there's a good chance your records are inadequate. In fact, a pilot programme has found that just under half of all SMEs had problems with their record keeping. The bad news is that HMRC is extending its business record checks with a planned 12,000 checks by the end of the current financial year. The good news? Well, if you can call it good news, the penalty will initally only be given in extreme cases.

"Good record keeping helps businesses pay the right amount of tax at the right time, thereby potentially avoiding interest and penalties," says Richard Summersgill, HMRC's director of local compliance.