I like the name and will do my best to meet the objectives of this column. All readers are invited to send any requests or questions you have about tax and accounting, and I will endeavour to answer those here.
I have to say that in real life accounting can be either an angel or a ghost, depending on how well it is managed. Accounting is hardly a favourite task and according to some surveys 1/3 of small-business owners find accounting the hardest part of managing their business.
But if you think leaving your accountant alone to do all the worrying about your business's income tax is a good idea, then you could be making a costly mistake. Your accountant may be the tax expert but no one knows your business as well as you. That's why they need your help to keep your income tax to a minimum.
Most people have heard the saying that you cannot avoid death or taxation. It is true that we cannot escape paying tax but if you plan properly you can save money.
Here are my top tips:
1) Study the relevant accounting & tax laws: As the manager or business owner, you should have some basic knowledge about the accounting and tax laws related to your business.
2) Use a tax expert: Use an expert to advise how to do everything correctly, get help to plan your taxes and to monitor the implementation of your taxplan.
3) Keep your books up-to-date: Keep your accounting books in real time, make sure you have transparency and comply to the law and to your tax-plan.
4) Keep up to date with filing your taxes: File your tax returns accordingly and ON TIME!
5) Keep Informed: Stay informed about ongoing changes in accounting and tax laws. A regular consultation with your accountant can provide you with current rules that may affect your particular situation.
6) Be proactive: The Revenue Officers are appreciative of companies who take responsibility for their tax troubles. If you have a tax problem, do not ignore it. Deal with it as soon as possible. Increasing interest and penalties alone are good reasons for handling the problem immediately. More over a tax lien is forced if you ignore paying the tax and penalty.
7) Know your rights: If you have been told to pay taxes, fines and interest then you can appeal the decision if you disagree with it. If you accept then you can request payment by installment if the amount is too high.
You can also request to waive or reduce the fine if you can prove that you did not have any intention to evade taxation and cooperate well during the tax audit, but please note that reduction or waiving of taxes and interest are not possible.