This is the single biggest thing that you can do to minimise tax and penalties. If your records are up to date you will:
- know when you need to VAT register so no late registration penalties
- know how much tax you are likely to need to pay so you can squirrel it away long before the due date so no late payment penalties
- know how much profit after tax is available to take as dividends so no penalty tax on overdrawn directors’ loan accounts (DLA)
- have up to date information to ask your accountant for advice before you make any major business (or life) decisions
Frankly, I’m sick of being asked to help directors out of a hole long after the time has passed for action. Whilst I might sympathise, I can do much more if provided with basic information and consulted early rather than having to refer clients to HMRC for a Time to Pay arrangement after the event when we are finally given information to START preparing the accounts.