Don’t let small errors cost you big – here’s how to stay on the safe side with HMRC.
When it comes to managing your business finances, tax can be one of the most daunting responsibilities. Even with the best intentions, common mistakes can creep in—and unfortunately, they can cost you time, money, and even your peace of mind.
At Legacy Accounting, we regularly help clients clean up after these errors, and we’re here to help you avoid them entirely. Let’s walk through some of the most frequent tax mistakes UK businesses make—and how to stay compliant, efficient, and confident.
1. Missing Deadlines = Late Penalties
What’s the risk?
Missing your Self Assessment, VAT, or Corporation Tax filing deadlines can result in automatic penalties—even if you owe no tax. The longer you delay, the more the penalties stack up.
Real impact:
- Interest charges on unpaid tax
- Potential damage to your HMRC record
✅ What you can do:
Set reminders. Use accounting software that alerts you. Better yet, have your accountant submit filings well ahead of deadlines.
2. Not Claiming Business Expenses = Higher Tax Bills
What’s the risk?
Too many business owners underclaim expenses they’re legally allowed to deduct. That means you’re likely paying more tax than necessary.
Often-missed expenses include:
- Home office costs
- Mileage and travel
- Marketing and advertising
- Subscriptions and training
- Software or equipment purchases
✅ What you can do:
Keep clear, organised records throughout the year. A qualified accountant can review your transactions and spot opportunities for tax savings you might miss.
3. Incorrect Reporting = Risk of HMRC Audit
What’s the risk?
Errors on your tax return—whether due to guesswork, poor record-keeping, or lack of understanding—can raise red flags. This can lead to an HMRC enquiry or full audit.
Common reporting mistakes:
- Mixing personal and business expenses
- Misreporting income from side gigs or multiple sources
- Entering inaccurate figures based on estimates
✅ What you can do:
Always report actual figures backed by documentation. An accountant will verify your numbers and ensure all reporting is fully compliant with HMRC rules.
FAQs: Business Tax Errors
Q: What happens if I miss the Self Assessment deadline?
A: HMRC charges a £100 penalty immediately. The fine increases over time, and interest may apply to any outstanding tax.
Q: Can I go back and claim expenses I forgot to include?
A: Yes. You can amend your return within 12 months of the filing deadline to include additional allowable expenses.
Q: How do I know if I need to register for VAT?
A: If your business turnover exceeds £90,000 (as of 2024/25), you must register. If you’re close to the threshold, it’s worth discussing voluntary registration.
Why Professional Support Makes a Difference
You didn’t start your business to spend your days deciphering tax codes. Partnering with a trusted accounting firm not only helps you avoid costly mistakes but can also unlock hidden savings, streamline your finances, and let you focus on growth.
At Legacy Accounting, we support individuals, small businesses, and growing enterprises with smart, stress-free tax guidance. Whether it’s your first tax return or you’re looking to refine your processes, we’ve got your back.
Let’s Make Tax Easy
Need help getting your tax right the first time?
Contact Legacy Accounting today to book your consultation.
📧 Email: info@legacyaccounting.co.uk
📞 Call: 01235 820000
🌐 Visit: LegacyAccounting.co.uk
