Will the nasty taxman come knocking on your door soon?
HM Revenue are actively targeting small businesses
We’re all aware of the multi-national companies that seem to be able to avoid paying a fair amount of tax, but we don’t often hear of the other corporates who manage to be able to negotiate cushy arrangements with the tax man.
Large corporates have exceedingly deep pockets to pay for specialist legal and financial teams and are often more than a match for the Inland Revenue. Unfortunately this means that the softer target of small businesses are now beginning to experience the uncomfortable attentions of the tax man.
Most of us are small businesses and most of us are happy to pay our fair share of taxes but we don’t want to pay more than we need to and we don’t want to be penalised for any mistakes we make. It’s often honest mistakes that the tax man uses to extract more tax from small businesses.
HMRC now has a special task force to specifically target small businesses, particularly those that complete their own tax returns. Research carried out by accountants UHY Hacker Young show a decrease in tax takings from large companies and a significant increase into tax investigations into small companies.
One of the most worrying aspects is the fact that the Revenue seems to have no qualms about penalising companies for genuine mistakes, often several years in the past.
What can you do to protect yourself? Two key things you can do to try and avoid problems are to make sure you keep excellent, up to date records. Try to avoid having all your paperwork in a shoebox until the end of each year because this is bound to lead to errors. Using a cloud based accounting system such as Xero will help you efficiently keep on top of things.
Engaging a fully qualified accountant to produce and submit your tax returns will also help avoid mistakes and it would appear that the Revenue are less likely to investigate returns when submitted by a professional accountant.
We’re always happy to chat with people to discuss how we can help and we don’t just file accounts for companies, we’ll actively give business advice and we make sure that none of our clients pay anymore tax then they legally need to. Get in touch to see how we can help you.