Careless accounting hits big business in the pocket

Sloppy accounting has been a reason for some of the UK’s biggest businesses being hit with large fines in the past year.

A recent report has shown fines totalling £59m in the past year on businesses managed by the Large Business Directorate (LBD) for ‘Failure to Take Reasonable Care’ to ensure all information given is correct.

This body has been responsible for overseeing the tax compliance of 2,100 UK businesses.

HMRC sees carelessness relating to tax as a huge multi-billion-pound problem and in recent years has taken a harder approach to minimising the tax gap as it seeks added sources of revenue.

The tax man believes that £5.9bn in tax for 2016/17 remains unpaid across all taxpayer groups due to ‘careless behaviour’.

The report shows finance directors and other senior executives being fined due to failings in their company accounts. This, together with ongoing investigations of large companies has led to HMRC collecting an additional £8bn in tax.

Human error is part of the fallibility of all businesses and all walks of life, but this issue shows even the biggest companies do not get things right all of the time, despite having highly paid financial experts on their side.

Good accounting at all levels regardless of the size of an organisation is a must. Taking time to examine practices and create procedures that ensure a business does not feel the wrath of the tax man is vital.

By levying fines on individuals, HMRC is showing that finance directors are not safe if there are errors in a company’s tax affairs.

For those worried about tax, we at AIT Accountants in Solihull can help put your mind at ease assisting many businesses across the UK and in Solihull and the Walsall region, in particular.

Our team are here for any questions you may have about managing and growing your business, so feel free to contact us

We have an array of accounting services to help you including management accounts, VAT returns and payroll.  For a list of all our services, click here