Question 1

What is audit ready bookkeeping?

Accepted Answer

Audit ready bookkeeping ensures your accounting records are complete, accurate, and properly organised, ready for HMRC audits or Companies House filing, reducing the risk of penalties and compliance issues. Audit ready bookkeeping typically involves ensuring all transactions are recorded correctly, all supporting documentation is organised and accessible, bank reconciliations are up to date, VAT returns are accurate, and records meet HMRC and Companies House requirements. Proper bookkeeping reduces the risk of HMRC audits and penalties, helps businesses prepare for audits efficiently, ensures Companies House filing deadlines are met, and provides confidence that records are accurate and compliant. It's worth getting professional help to ensure your records are audit ready.

Question 2

What records do I need for HMRC audit?

Accepted Answer

For HMRC audits, you need to provide complete and accurate accounting records, including: sales records (all sales invoices, sales receipts, sales ledgers, sales summaries), purchase records (all purchase invoices, purchase receipts, purchase ledgers, purchase summaries), bank statements (all business bank account statements, bank reconciliations, bank transaction records), invoices and receipts (all invoices issued and received, all receipts for expenses, supporting documentation for all transactions), VAT records (VAT returns, VAT records, VAT invoices, VAT receipts, MTD digital records if applicable), accounts (profit and loss accounts, balance sheets, management accounts, annual accounts), and supporting documentation (contracts, agreements, correspondence, notes, explanations for unusual transactions). HMRC can request records going back several years, so it's important to keep records for the required period. It's worth getting professional help to ensure your records meet HMRC requirements.

Question 3

How do I prepare for HMRC audit?

Accepted Answer

To prepare for HMRC audit, you should: ensure all transactions are recorded correctly (all sales, purchases, expenses, income, bank transactions recorded in accounting records), organise supporting documentation (all invoices, receipts, bank statements, contracts, etc. organised and accessible), reconcile bank accounts (bank accounts reconciled, all transactions accounted for, bank reconciliations up to date), ensure VAT returns are accurate (VAT returns based on complete and accurate records, MTD requirements met if applicable), review records for accuracy (review accounting records for accuracy, identify and correct any errors or discrepancies), ensure records meet HMRC requirements (records meet HMRC record-keeping requirements, MTD requirements met if applicable), and organise records for easy access (records organised so they're easy to access and review, reducing time spent on audit preparation). Professional help can ensure your records are properly prepared for HMRC audits.

Question 4

What is Companies House filing?

Accepted Answer

Companies House filing requires limited companies to file annual accounts (abbreviated accounts or full accounts depending on company size) and annual confirmation statements, with accounts prepared in accordance with Companies Act requirements. Annual accounts must include: balance sheet (showing company assets, liabilities, and equity), profit and loss account (showing company income, expenses, and profit or loss), notes to accounts (providing additional information about accounts), and director's report and auditor's report (depending on company size). Confirmation statements must include: company details (company name, registered office, company type), shareholder information (shareholders, shareholdings), and director information (directors, secretary if applicable). Companies House filing deadlines must be met (typically 9 months after accounting period end for accounts, annually for confirmation statements) to avoid penalties. It's worth getting professional help to ensure Companies House filing is completed correctly and on time.

Question 5

Do I need audit ready bookkeeping?

Accepted Answer

You may need audit ready bookkeeping if you: are a limited company (need Companies House filing, annual accounts preparation), are VAT-registered (need MTD compliance, VAT return accuracy), have been or might be subject to HMRC audit (need complete and accurate records, supporting documentation), want to reduce audit risk (proper bookkeeping reduces risk of HMRC audits), want to avoid penalties (proper bookkeeping helps avoid HMRC and Companies House penalties), or want peace of mind (proper bookkeeping provides confidence that records are accurate and compliant). Most businesses benefit from audit ready bookkeeping, especially limited companies and VAT-registered businesses. It's worth getting professional advice on whether you need audit ready bookkeeping.

Question 6

How much does audit ready bookkeeping cost?

Accepted Answer

Audit ready bookkeeping costs vary: records assessment and cleanup typically costs £500–£2,000+ (one-off), HMRC audit preparation typically costs £800–£3,000+ (one-off), Companies House filing preparation typically costs £600–£2,500+ (annual), audit ready bookkeeping service typically costs £200–£800+ per month (ongoing, monthly/quarterly), and comprehensive audit ready service typically costs £400–£1,500+ per month (ongoing + audit/filing support). Costs depend on: records complexity (simple vs. complex records), current records state (well-organised vs. disorganised), service scope (one-off vs. ongoing), and ongoing support level. It's worth getting quotes from providers to compare costs and services.

Question 7

What happens in an HMRC audit?

Accepted Answer

In an HMRC audit, HMRC reviews your business records to ensure you're paying the right amount of tax. HMRC can audit your records at any time, typically focusing on specific areas (e.g., VAT returns, expenses, income, etc.). HMRC will request records and documentation (sales records, purchase records, bank statements, invoices, receipts, VAT returns, accounts, etc.), review records for accuracy (checking transactions are recorded correctly, checking VAT returns are accurate, checking expenses are legitimate), ask questions about records (requesting explanations for unusual transactions, requesting clarification on records), identify discrepancies (identifying errors, omissions, or discrepancies in records), calculate additional tax (if discrepancies are found, calculating additional tax due, interest, and penalties), and request payment or adjustments (requesting payment of additional tax or adjustments to future returns). Proper bookkeeping and audit preparation can help you handle HMRC audits confidently. It's worth getting professional help if you're subject to HMRC audit.

Question 8

What records do Companies House require?

Accepted Answer

Companies House requires limited companies to file: annual accounts (abbreviated accounts or full accounts depending on company size, including balance sheet, profit and loss account, notes to accounts, director's report and auditor's report depending on company size), confirmation statements (company details, shareholder information, director information, filed annually), and supporting documentation (accounts must be based on complete and accurate accounting records, with accounting records kept for required period). Annual accounts must be prepared in accordance with Companies Act requirements and accounting standards, filed within 9 months of accounting period end (for accounts) or annually (for confirmation statements). Companies House can request additional information or documents if needed. It's worth getting professional help to ensure Companies House filing requirements are met.

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