A ‘double hit’ for careless mistakes

Author: Mark Webb

Categories: Business risk, Tax Planning
Tags: double hit

Mark Webb: "If a company fails to look after its tax position correctly two things flow. If there’s tax due there will be interest charges, so the business has got to find that and fund it, and there can be penalties.  And part of the issue with penalties, if they’re raised is that they are an actual cost for the business and they’re not tax deductible. There’s two main problems.  The first is that if they’ve got to make payments of tax and they should have been made earlier, obviously there’ll be an interest cost, that’s how the Revenue treat late payments of tax.  But also if there’s a penalty raised then a penalty situation is, that’s actual money from the business and it’s non-tax deductible in a lot of circumstances.  So there’s almost a double hit for that type of business if that happens."

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