This is something that seems to come up a few times a year, but it’s one that is always worth looking at – the cost of making mistakes on your tax return!
Many contractors and small businesses have turned to online accountancy software packages to keep business costs down. If you are experienced and confident with general bookkeeping this could prove to be a worthwhile exercise rather than a manual bookkeeping system.
We have partnered up with KashFlow QuickBooks and Xero the revolutionary online accounting software market leaders that are both user-friendly and reduces the risk of possible errors. Many of our clients now use these systems thus reducing the time we spend on their bookkeeping (and the amount they spend on bookkeeping costs.) Some clients still prefer us to do their bookkeeping, which is fine as all of the team are trained in each software.
HMRC recently issued their annual reminders about the fines and penalties faced by companies, however, this time the fines are pretty much set in stone.
The penalties for late Self Assessment returns are:
• An initial £100 fixed penalty, which will apply even if there is no tax to pay.
• After 3 months, additional daily penalties of £10 per day, up to a maximum of £900;
• After 6 months, a further penalty of 5% of the tax due or £300, whichever is greater; and
• After 12 months, another 5% or £300 charge, whichever is greater? In more serious cases, the penalty after 12 months can be up to 100% of the tax due.
Penalties for paying late are 5% of the tax unpaid at:
• 30 days.
• 6 months; and
• 12 months.
Interest could also be charged on top of these penalties. The tax return deadlines are unchanged – 31 October for paper and 31 January for online returns. The deadline for paying any tax due also remains the same as 31 January each year with the balancing payment due by 31 July.