Common Tax Mistakes That Can Sting Your Business!
Are you leaving yourself exposed to heavy penalties? Below are some common tax mistakes that can sting your business!
Because taxation is a largely overlooked aspect of business there are a range of areas where businesses make costly errors. Mistakes can be very unpleasant as the revenue commissioners have clamped down in a number of areas in recent years. Below are some of the costly penalties that can hit your pocket.
- Failure to keep proper PAYE/VAT records €4,000
- Failure to issue proper VAT invoices €4,000
- Failure to complete VIES returns €4,000
- Late submission of a VAT return €4,000
- Violating PAYE regulations €4,000
Here are some specific mistakes that are seen on a regular basis:
Value Added Tax
- VAT cannot be claimed on entertainment for clients & staff, food and drink (unless for re-sale) and accommodation (unless qualifying event)
- Ensuring all VAT on sales is charged at the correct rate to customers
- Making sure Intrastat Forms are correctly completed in respect of goods and services supplied/received cross-border
- Knowing that VAT is only reclaimed on ‘allowable’ items and based on proper VAT invoices
- Ensuring all relevant VAT reliefs have been claimed and cash flow saving opportunities have not been missed
- It is vital that invoices are not issued without VAT in error as the supplier remains liable for the VAT.
PAYE
- Employees/Directors are often placed on the wrong PRSI rate. The cost of an error to the employer can be significant as the rate of employers PRSI is 10.75%
- Ensuring amounts reimbursed to staff for expenses incurred (mileage etc) are correctly calculated in accordance with revenue rules
- Making sure there are no individuals being paid gross by invoice where payroll should be operated
- Ensuring there are no benefits being provided to staff/directors which should be subject to PAYE but are not being included in the calculations
- Making sure staff are rewarded in a tax-efficient way maximising the use of any relevant allowances and reliefs available.
Tax legislation is constantly changing and this brings both risks and opportunities. Revenue have significant powers to review a taxpayer’s affairs. Most of the taxation risks encountered by businesses present themselves in everyday scenarios. This is where the real tax mistakes are made.
For information and assistance on processing payroll for employees, speak to Niamh on +353 (0)41 68 63 000 or Request a callback from our Payroll Team today.
PaycheckPlus – 10 years Making Payroll Easy!
Laura joined our Payroll Outsourcing Service after obtaining an honours bachelor’s degree in business. She joined the Paycheck Plus Graduate Programme as a Trainee Payroll Specialist where her primary duties involve supporting her colleagues in delivering an award-winning payroll outsourced payroll service. She is currently studying for a professional payroll qualification through the Irish Payroll Association.