Tax return compliance is an integral part of running a small business. Making sure you send your returns to HMRC accurately and on time can save you from a myriad of issues further down the line.
But sometimes, mistakes happen. So what happens if things go wrong?
This article will explain what happens if you fall behind regular tax return compliance standards and how to avoid that happening.
Tax return compliance with HMRC
First things first, we’re not trying to scare you. We understand how stressful taxes can be. If you spend most of your waking day running your business, it can be easy for some things to go unnoticed.
HMRC also issues penalties to individuals and businesses that fail to submit accurate and timely tax returns. For example, if you miss the self-assessment tax return deadline at midnight on 31 January, even by a minute or two, you’ll receive an automatic £100 fine. This increases the longer you wait to submit your return.
Consequences of poor tax compliance
Mistakes can also prove costly, especially if HMRC finds you made deliberate errors. But penalties and compliance issues can have more than just a short-term financial impact on your business:
1. Your cashflow
First, financial penalties can quickly add up, costing you more than just a couple hundred pounds — it can seriously hurt your long-term cashflow. That could mean coming up short when you try to purchase some new equipment, or even cover another bill.
2. Loss of time
If you are fined because you made a mistake on your return, you have to file another one. As such, you’ll have to double check your figures and update them on your new return — which is a lot of time you could have spent on your business.
The way we see it, you should only have to do your tax return once. Having to continuously amend errors is a waste of your time and resources.
You may think amending your tax return takes time, but it’s not comparable to having an HMRC investigation launched into your affairs. Making regular errors in your return or often filing late will arouse HMRC’s suspicions and it’ll likely investigate your tax history.
No one wants that for their business. So, make sure to keep on top of your tax return compliance to mitigate the risk of investigations — but be aware that HMRC sometimes launches investigations at random.
Tax return compliance services for you
Tax return compliance is a necessity for businesses and individuals across the country. Failing to stay compliant can cause financial issues and create hurdles in your day-to-day life.
Rather than wait and see if things will work out, get in touch with us to address these challenges head on and stay on the right track. We’ll complete your tax returns for you so you don’t risk falling behind and paying fines.
Our tax return compliance services also include compliance checks and assistance with HMRC investigations so you’re not left on your own.
If you need help ensuring your business meets tax return compliance standards, get in touch with a member of the team.