Today, it has come to my attention that there is about £500 of stock missing........^I know I must speak to my employer tomorrow, it is the right thing to do^
Whether or not, it's the 'right' thing to do, depends on your role within the company. To begin with, unless there's due diligence, employers cannot act on mere suspicions. Someone's job and livelihood could be at stake here and there are also legal implications.
If your job responsibility is to report a discrepancy, then by all means, proceed under company guidelines (albeit small businesses often lack clear policies). Your employer will take it from there.
Having said that, I would not escalate without investigating the matter further. It could be an accounting error, misplaced inventory, a delayed sales report, etc.