Accountants deluged with Tax Assessment
As we embark upon a new year, self assessment season is here, and there are few reasons to be jolly. For accountants, this most likely means even more daunting and stressful times ahead. More clients are seeking services from accounting experts to file business tax returns. Trying to balance everyday work to keep the business running while staying on top of self assessment season leaves major responsibility on your accountant shoulders.
To help take the load off – here are a few reminders on how to correctly prepare for tax returns and avoid penalties.
Measure and Assess Risk
When filing and completing an HMRC tax return – all documentation has to be foolproof in order to avoid incurring penalties and additional fines. More importantly, for clients or for your own practice, assessing all possible risk factors in your report (such as major investments, activities and profitability) contributes to a better understanding of the businesses’ finances.
Minimising the risk of a Tax Investigation can save your company some hefty fines, especially when the effects of the pandemic have brought tension to businesses’ profits. The severity of fines and penalties often vary on underlying factors like miscalculated payments or errors in reporting figures, as we’ve seen recently in some of HMRC’s naming and shaming of companies for not paying the minimum wage. Monitoring any violations that can lead to investigation, assessing possible tax liabilities, and accurately disclosing all taxable items with clients and within the business ensures full compliance.
Document Thoroughly and Make Copies
Keeping a tax preparation checklist is another way to make this season easier for you. Gathering all receipts, supplementary forms, and audit trails can be better organised once you identify all the documents needed to fill in the tax return accurately.
Repeatedly, to avoid fines, having all the necessary information at hand is used to support your claims for any deductions or claimed credits. It’s best practice to wait for all income reports and bank statements and make additional hard copies and electronic ones to stay organised. Make use of integrated accounting software to automate the process of recording files to ease the stress on manually gathering documentation.
There’s more to just meeting the tax return deadline in the upcoming months. The days or weeks leading up to it means settling and chasing any unpaid payments. Unfulfilled transactions may result in a change of total balance or credit, making inaccurate calculations on your reports.
To move away from pending transactions and get to receiving payments instantly, use Ordo to chase unpaid invoices. Easily track when payments or invoices have been read and received to conclude all pending transactions before filing your tax returns. After all, if you can avoid getting additional fines due to going past the deadline while saving money and time, why not take advantage with an instant reconciliation app like Ordo?
Tax assessment season might be more difficult than ever due to the effects this pandemic has brought. While the more obvious effects have been manifesting on a businesses’ profitability, some effects continue to be undetermined. Until then, belt-tightening wherever possible is needed to keep the business afloat. Whether it’s through limiting tax liability and penalties or saving on fees to conduct payments, it remains essential to stay on top of all financial statements in order to keep up with tax return season. Book a quick demo with Ordo today to save you time and money, and keep you and clients secure, in this intrepid 2021.
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