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.

Most businesses will have noticed their overheads increasing rapidly in recent years, but the truth is that overheads have actually risen by nearly a quarter in just five years with transport, energy bills and insurance the biggest offenders. Not surprisingly, this is having quite an effect on many businesses who simply can't sustain this kind of growth in costs and, in fact, see it as the biggest threat to their business. It's not surprising, considering this news, that so many businesses feel this country has become simply too expensive when it comes to doing business.

Banks believe SMEs are, for the most part, receiving the finance they require, while SMEs often feel it's not even worth applying for finance in the belief that they will be turned down anyway. A recent study from the Business Finance Taskforce has actually shown that over half of SMEs who applied for bank credit during the past year were, in fact, successful. Similarly 72% of SMEs had overdrafts approved and 59% of SME loan applicants were successful.

While all this sounds good, it's all relative to the number of applications, and the reality is that only 15% of SMEs applied for new credit. Another important point is that the smallest SMEs are losing out to medium-sized companies in the finance stakes.