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How Will Incorrect Tax Payments Impact Your Business?

By July 20, 2017Blogs

Although you might trust in your accountant, an error can still impact your business massively, which is why it is important to choose someone you can rely on to handle finances. But how exactly could a small mistake or a late submission from your accountant impact your business in a less than positive way? Read on and find out…

Coleman & Co use the correct systems to ensure there are never any mistakes when it comes to calculating payments and managing tax returns, ensuring your business is not punished for bad accounting skills.

Who Is Reliable For Errors?

Although you might not make the error yourself, you are always responsible for keeping your tax forms and submissions accurate. Even if you send off all the perfect information to your accountant, expecting them to calculate just as perfectly, any errors will come back to haunt you.

In the rare case that something is filed wrong or a payment is made late by your accountant, this could cause a penalty or fine to occur. The HMRC will then view this as an error by you and your business, as you oversee keeping all information accurate. This means if the error is your fault, then you will have to cough up and pay the money that your accountant has cost you.

This is one of the many reasons why when you send information to your accountant, it should be clear and accurate and you should always trust in who you are sending it to.

What Punishment Can You Face?

Unfortunately, there are a lot of penalties that you could face as a business, based on how severe the mistakes are in your payments. HMRC will only charge penalties for an error because of:

  • Lack of ‘reasonable care’
  • Intentionally sending incorrect information
  • Intentionally sending incorrect information and taking steps to hide the error

If a mistake is made without any of these conditions, first time round, you will often go unpunished without having to pay anymore extra tax – but don’t make this mistake twice. As VAT return is required by the HMRC every three months, if you have two defaults within 12 months, you will be charged 2% extra when your next payment comes around. The extra amount charged will then increase based on how many defaults you have in a 12 month period.

Again, your accountant or whoever calculates your tax returns will have no part in paying this, it will all come from your business which is why the best option is to make sure it’s correct first time.

Keeping Payments Exact

The way to avoid having to pay extra on your taxes or constantly having to make amends to your forms, is to keep your payments 100% accurate. By using computerised accounting systems, you can have full confidence in accountants as these systems are designed to work specifically for accounting.

Computerised accounting systems will ensure tax payments are made correctly and if initial information is input into the system right, it will never make a mistake that could cost your business. We aren’t saying you shouldn’t place your trust in accountants, as long as they have the professional equipment available and fully trained staff (something Coleman & Co do have!) then they should be just fine.

Accounting systems are always accurate and will cut out the mistakes that cost your business money. All data is secure and can be amended by anyone you choose to share it with, meaning you can make edits and thoroughly check that your tax payments are correct before submitting forms to the HMRC.

Amending The Situation

Errors do happen and sometimes you just have to take this in your stride. If this happens twice and you see yourself facing punishment because of it, the best thing to do is to work with the HMRC to reduce any punishment, rather than fighting a lost cause. With the help of professional and quality accountants who understand all tax legislation, this shouldn’t be a problem and errors will always be eradicated immediately.

Contact Us

Make sure that your tax payments are completely accurate every time and contact our team today. Coleman & Co will help all businesses in every industry manage their finances effectively, so call now on 028 9266 3599.

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