Few would disagree that starting a business is an exciting time, but when it comes to the finer, official details it can be tricky to get your head around. Accounting in particular can be a complicated subject at the best of times – mainly because tax repercussions can be so significant if you don’t do things by the book.
Unfortunately, due to the sheer amount of information that exists about accounting, there are a lot of myths that have entered the picture. Through the course of today’s article, we will now take a look at some of these myths in-detail and show what you should not believe.
Myth #1 – Everything has to be prepared by a qualified accountant
There are a couple of dimensions to this first myth. First and foremost, your accounts don’t have to be prepared by a qualified accountant. HMRC actually allow anyone to carry out this process – although whether you want to follow such an approach is debatable. Accountants can, after all, save you money as they know exactly what you can claim back as an expense and so on.
The second dimension is what determines the definition of accountant. Don’t for a second believe that you have to visit them in-person anymore, this isn’t necessarily the case. Online accountants, with More Than Accountants being one example, are becoming exceptionally possible as everything is carried out digitally. It’s also much easier for companies like this to have custom packages, through quoting engines, which can again save you a little extra money.
Myth #2 – HMRC are correct with everything
Don’t worry, even HMRC get things wrong. In fact, it’s not been unheard of for them to send tax bills which are completely off the scale and inaccurate, or to even do the opposite and charge you less tax.
There’s absolutely no problem in querying your tax bills – this is something that HMRC will almost welcome. Of course, if they do make a mistake (either in your favour or not), you will pay the correct figure. This might involve you topping up your initial payment, or receiving a refund.
Myth #3 – Every company in the land will be subjected to an audit
If HMRC had their way, there’s every chance they would follow this route. However, if you have paid attention to any news stories in relation to tax over the last few years, you will have seen that they are severely under-resourced. What this means is that they don’t have the resources to initiate an audit on all companies. Instead, it’s the larger ones that tend to be subjected to these.
At the same time, this shouldn’t make a difference to you. Sure, the likelihood of receiving an audit certainly diminishes, but at the same time it can still happen to a small business. In addition, there shouldn’t be any excuses of breaking tax laws, just because you don’t think HMRC are going to chase after you.