HMRC has obtained new data from PensionBee and it has revealed a worrying trend about self-employed workers’ tax returns.
Why are lower-paid self-employed workers twice as likely to file late taxes?
Blogs
Viral TikToks can boost your business – Are you ready to handle the success?
With a greater awareness of marketing strategies and a growing presence of Gen Z workers, more businesses are turning to TikTok to grow their brands.
Businesses bear the brunt of nearly £1 trillion tax bill – Are they able to handle the extra costs?
If businesses feel as though they are paying more tax than ever, there is a reason for that.
Is now the perfect time to file your Self Assessment tax return?
HMRC has sent out a message to some of the 12 million people with Self Assessment tax accounts in the last week or so, alerting them to the need to file their next Self Assessment tax return.
Health screenings – A tax-efficient employee benefit
Many employers are on the lookout for new means to attract talent to their business in an increasingly competitive labour market, but many aren’t aware of annual health screenings and their tax-efficient benefits.
91 per cent of SMEs are unaware of HMRC’s new e-invoicing requirements
From 1 April 2029, all VAT-registered businesses will need to change the way that invoices are handled.
What happens when you underpay tax?
The new tax year has recently begun and it is a time when businesses and individuals will need to review their position to ensure that they are not caught out by shifting rules and fiscal drag.
It is also the time to look back on how taxes were handled in the previous year and this might come with a sinking feeling that something is not quite right.
If you spot an error in how you calculated your tax and fear that you may have underpaid, then it is vital you understand what to do now.
What should I do if I have underpaid tax?
Underpaying tax is an issue that can affect both businesses and individuals alike.
Larger businesses tend to be more compliant as they utilise accounting experts to ensure that they keep pace with new tax regulations as they get introduced and have dedicated teams crunching the numbers. SMEs historically struggle to keep up with tax requirements, with HMRC noting that the tax gap for small businesses Corporation Tax is 40.1 per cent of the small businesses theoretical Corporation Tax liability, or £14.7 billion in absolute terms, in the 2023 to 2024 tax year.
For individuals, dividend tax and stamp duty land tax seem to be areas that frequently make the news for their seeming difficulty in paying accurately.
In both instances, the errors are often attributed to a lack of understanding of how the tax system works or the reliance on dubious advice.
Where you become aware of having underpaid tax, you should not view this as a victory over HMRC, as they will discover the error on their own terms eventually.
Instead, it is vital that you make a voluntary disclosure at the earliest possible opportunity.
By owning up to your mistake, you will show honesty and integrity that HMRC appreciate and they will be less likely to pursue severe action against you.
HMRC’s Digital Disclosure Service (DDS) will generally be the best course of action to manage any reports of underpaid tax, but if you are a business owner who suspects that fraud may have occurred, then it may be better to use HMRC’s Contractual Disclosure Facility (CDF).
The CDF will allow you to alert HMRC to the crime without implicating yourself – unless it comes to light that you were directly involved in it.
How can I stay compliant with tax this year?
The new tax year is a chance for a fresh start as you get another chance to submit all of your annual requirements.
Seeking professional financial support is imperative in ensuring accuracy, particularly if your estate or business is complex.
Small businesses and individuals often try to power through without expert help and this results in the situations we have discussed here.
Instead of rolling the dice and hoping that you get things right, our expert team can review your tax obligations so that you can pay what you owe when you owe it.
Beyond this, seeking professional support may help you to lower your tax bill as you become aware of reliefs and more tax-efficient structures that may otherwise have passed you by.
Tax does not need to be difficult and should not cause you to become stressed about the accuracy of your bills.
Speak to our team for confidence in managing your tax obligations.
Do you know how to manage the increased director’s loan tax charge?
We are officially a few days into the 2026/27 tax year and directors need to be positive on how the latest reforms affect them.
Only 57 per cent of UK SMEs rely on accountants – Could the rest be holding their business back?
Running your business can feel like a constant juggling act of trying to manage rising costs and staying on top of compliance.
Are close companies about to have more reporting requirements?
As the steady expansion of reporting obligations continues, it seems that the time has come for close companies to face greater scrutiny.