Common tax return mistakes made by SMEs
Filling in your tax return can be stressful; for most SMEs, it becomes one of the most stressful periods of the year. Innocent mistakes can lead to hefty fines and greater future scrutiny from HMRC, both of which you want to avoid. As such, here are four of the most common tax return mistakes made by SMEs, according to our experts, that you need to watch out for and avoid.
1. Forgetting to include interest
You need to include all income sources on your tax return, and this means every source of income no matter how small. Most SMEs have an interest-earning account, or perhaps an off-shore bank account, and HMRC is going to know about these. Therefore, even the smallest amounts of interest accrued need to be included, to avoid any further investigation which is both costly and time consuming.
2. Not explaining unusual variations
Tax returns provide you with a white box to explain anything strange or unusual about your declarations. Use this box to provide all and any information you think might be necessary for HMRC to understand your submission; doing so will mean HMRC is less likely to start an official enquiry if something looks amiss which hasn’t been explained. You don’t need to be overgenerous in your explanations, but ensure that you keep them simple, honest and easy to follow.
3. Miss-claiming for expenses
The rules and regulations on what can or cannot be claimed on expenses are not as simple as it first seems – if you are claiming for lots, or a wide variety, of expenses, it may be worth checking these with your tax advisor or accountant. HMRC has been cracking down on expense claims in the past few years and is challenging these more frequently. Making sure you know the complicated rules around this area is key to avoiding problems further down the line.
4. Trying to save money by doing tax returns in-house
Not many people are trained in tax, and it’s unlikely that getting your IT analyst to help with your tax returns will be as successful as hiring a professional. While HMRC suggests that ‘tax doesn’t have to be taxing’, correctly completing your tax return is not as straightforward as it seems, and it’s not a show of bad business management to ask for help from local accountants in Seaford and Uckfield. In fact, by hiring someone to assist you, you may well be avoiding future fines from HMRC for mistakes that you would otherwise make. If you do decide to do it yourself, use the HMRC website for clarification and don’t leave things until the last minute.
To discuss your specific situation and for help with your small business tax return get in touch with our Business Services Partner Robert who can discuss this with you:
Tel: 01825 763366
Tax avoidance vs tax evasion: What you need to know
Tax avoidance and tax evasion are sometimes confused and used interchangeably. Whilst the terms avoid and evade are similar linguistically, they stand for very different concepts legally. Both are ways used to pay less tax however, tax avoidance is legal whereas tax evasion is illegal. This article will discuss the two concepts and tell you all you need to know.
6 tips to keep your business productive this summer
The summer can be a disruptive period for business, a recent study found that productivity decreases up to 20%, attendance decreases by 19% projects take 13% longer and workers are 45% more distracted…This article will cover several tips on how to keep your business productive and moving forward this summer.
The modern-day role of the accountant
Today the responsibilities of accountants range from business analysis to legal compliance and reporting. They are more intertwined with the commercial and financial success of their clients and not only here to fulfil the traditional roles of preparing financial statements, tax planning and auditing. This article will discuss the multitude of ways in which your accountant can support your business aside from more traditional services.
Sign up to receive our private content
straight to your inbox