30 Jan What is voluntary disclosure and why is it important?
Accountancy is very important when it comes to running your own business.
A major part of this is completing annual tax returns to HMRC and quarterly VAT returns for VAT registered companies. It goes without saying that getting the right figures in these returns is key, as is ensuring they include all income generated. But what if you submit a return and realise a week or two later that you have got something wrong?
The best thing to do is consider making a voluntary disclosure. But what is this?
What is a voluntary disclosure?
In simple terms, this is the act of telling HMRC about any mistakes or non-compliant activity around your business accounts – without being prompted for them. It is key to note that this may be needed due to genuine accounting mistakes. Voluntary disclosure is not always due to nefarious business practices.
Why is voluntary disclosure important?
As a business owner, it is vital to act in a transparent way when submitting returns to HMRC. This is because any non-compliant activity they notice could see an investigation launched into your companies accounts. If any errors are confirmed, it may well see you hit with hefty fines or serious legal action.
By making a voluntary disclosure as soon as you notice a mistake, you are showing the authorities that you have nothing to hide and are not trying to deceive them. This reflects well on your business and should hopefully see less serious penalties applied if required.
How do you make a voluntary disclosure to HMRC?
If you do notice any accounting errors or activities you forgot to report, it is key to know how to rectify this. Many business owners will get professional advice from an accountant with this in mind. This not only allows you to run the issue by someone who is an expert in business accounting but also get their help with telling HMRC about it.
If you decide to make this disclosure personally, the best idea is to access the official HMRC website and follow the guidance shown. This usually involves letting them know who you are, what you need to notify them about and evidence to back up your claim.
Professional small business accounting in Manchester
If you are a business in Manchester that needs further advice around making a voluntary disclosure to HMRC, let SQK Accountancy help. Our professional team can have a chat about your situation, advise on what to do next and also how to go about it. We can also help with other areas of business accounting, such as payroll and annual tax returns.
Get in touch today on 0161 706 0444 or contact us for more details.