Given the major changes to Companies House, Making Tax Digital (MTD), and various other regulations in a short space of time, it is no wonder that business owners can be feeling a bit confused about their current obligations.
Into this chaotic churn of compliance stress, social media can often seem to present some intriguing or informative ideas about how to keep pace with the current requirements.
We want to caution business owners against trusting influencers without verifying the information with a trusted professional first.
Social media is a largely unregulated landscape where anyone can grab their phone and speak authoritatively on any subject to a large audience.
Often, social media can devolve into echo chambers where unverified information gets repeated so often that it supplants fact and becomes accepted as the truth even if it is false.
We are expecting to see this problem become worse with each new regulation change that is introduced, as many business owners will struggle to notice the difference between false information and newly introduced legislation.
Of particular concern is the vulnerability of Gen Z business owners to this kind of misinformation.
As Gen Z play a more prominent role in the workforce, we have to accept that the way they obtain and process information is vastly different to previous generations.
While younger Millennials may have grown up with familiarity to the internet, Gen Z were practically raised on it and are more likely to seek online resources as a means to guide their decision-making processes.
This means that bad tax advice can infect the business ecosystem through less experienced business owners and may even be repeated to those with more overall experience but who are uncertain about current obligations.
The best line of defence against bad tax advice is to ensure that all tax advice comes from a trustworthy, reliable source.
You should seek to verify any tax advice you see by determining the credentials of the one sharing it.
Get in touch with any influencer you see issuing tax advice to check their qualifications if they do not have them listed publicly.
This can be an important step in identifying misinformation and scams as HM Revenue and Customs (HMRC) do care about stopping bad tax advice from being shared.
If you can ascertain that an influencer is misleading people, report them to HMRC and it will work to shut down the bad advice before it can negatively impact too many business owners.
There does seem to be a spate of high-profile cases of people misfiling taxes, often with an insistence that bad advice played a part.
The best thing you can do in that situation is own up to the mistake as early as possible and provide HMRC with as much information as you can.
Some tax returns can be amended while in other cases you will need to face a penalty for the wrongdoing.
While the thought of a penalty might scare you into silence, penalties are generally lower for those who self-report their mistakes as it shows a willingness to do better going forward.
Here is where gathering evidence of an influencer’s reckless relationship with the truth can be useful as you can produce that evidence to show why you made the error in the first place.
It may not help to remove the penalty entirely, but it will help to stop the spread of misinformation to others.
Ultimately, the best way to mitigate bad tax advice is to seek professional guidance and support from a trusted professional.
We are here to help you understand your tax obligations and ensure that your filings are accurate and compliant.
Jim Botton – Pleasure Beach (Skegness)
