With Companies House reforms, Making Tax Digital (MTD) and a slew of regulatory changes landing in quick succession, it’s no surprise many business owners feel overwhelmed.
In that maelstrom of information, social media channels often act as a quick source of answers.
Some posts are helpful, but too many are misleading and acting on the wrong tip can be costly.
We are here to warn against placing your trust in unregulated influencers and encourage you to listen to the experts instead.
Social platforms are largely unregulated platforms where anyone with a camera can present themselves as an authority.
Echo chambers form fast with people absorbing and repeating false information until the original claim is treated as gospel by those who hear it.
That problem gets worse every time the rules change, because it becomes harder for non-specialists to spot subtle differences between true guidance and misinformation.
This might be a greater concern for Gen Z business owners.
Younger founders consume information differently as they grew up online and often turn to short-form content for practical answers.
This has meant that they are generally more innovative with seeking solutions to problems, but misinformation can sour things and poison business practices if allowed to be enacted unchecked.
What starts as a misunderstanding by a less-experienced owner can filter through the ecosystem and influence more seasoned operators who aren’t sure of the latest rules.
When encountering a new piece of advice on social media, you should view it with a degree of scepticism by default.
Before taking action on any advice you see, you should first work to verify the authority of the person giving the advice.
Ask the influencer directly about their qualifications if they do not have them listed publicly.
Gathering evidence before you act can protect you and help you build a case for HM Revenue and Customs (HMRC) if the influencer is spreading misinformation.
If you spot demonstrably false or reckless advice, then you should report it.
HMRC takes fraud seriously and views bad tax advice in the same way that it would view a scam.
Flagging dangerous material helps the authorities investigate and remove harmful guidance before it misleads more people.
Given the current range of high-profile cases of people underpaying tax and then blaming it on bad advice, you are likely not the only one who has been caught out.
The best thing you can do in that situation is to act quickly so that the matter can be rectified as soon as possible.
You should correct the return or make an amendment and, where appropriate, make a voluntary disclosure as early self-reporting usually reduces penalties because it demonstrates good faith.
Collecting evidence that you relied on an influencer’s guidance can be useful when explaining how the mistake happened.
It will not erase the issue or remove the penalty entirely but it can mitigate consequences and help prevent the same falsehood spreading to others.
It might seem intimidating to own up to a mistake like this, but you will be caught out eventually and owning your mistake is the best option in the long run.
Ultimately, if you want to be sure that your tax filings are fully compliant and accurate, you will need to seek the advice of a trusted, regulated professional.
As one such professional, we are here to help you understand your business’s tax obligations and keep up to date with your filings.
For trustworthy tax advice, speak to our team today!
