10th July 2018 Posted by - Alexander Accountancy
Many people are tempted to set up their own companies, prepare their own accounts, or submit their own tax returns, as they see this as a way to reduce costs. Unfortunately this frequently leads to problems that can be quite costly, and any savings from not getting expert help can soon be lost in extra tax, interest and penalties if mistakes are made.
So our advice is to consult an expert such as Alexander Accountancy at the start and avoid those potentially costly mistakes. And let’s face it our first meeting is free so people should not be put off by the cost. However if people are determined to go ahead without any help or advice some of the problems we have come across are listed below.
No authorisation code – When a company is registered with Companies House an Authorisation Code is sent to the Registered Office. These are often put to one side and lost. However this code is needed for online filing with Companies House so should be kept safe like any other PIN.
Bank Accounts – It is not unknown for people to register a company, but then not to set up the bank account correctly or using a personal account to save on charges. This can cause problems for tax purposes if there is a dispute over income being corporate or personal, potentially costing up to 26% of the income.
PAYE Schemes – We have recently come across several instances of individuals setting up a limited company, but not registering a PAYE Scheme. Meaning the company has been unable to pay them a wage and having to pay corporation tax at 19% on what should have been their tax free allowance.
VAT Registration – There are a number of times books brought to us have indicated turnovers well in excess of the VAT Registration Threshold of £85,000, but the business has not registered or paid VAT. This has left them exposed to outstanding VAT, penalties and interest costing thousands of pounds.
The above are just a few of the problems encountered. In the worst case an individual could lose the protection of limited liability and become personally liable for all of their companies liabilities. This really could mean they are risking everything.
If you need help getting started or to develop your business please call us on Burton upon Trent 01283 743851 or email email@example.com
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