The common impression is that tax penalties punish evaders. The truth is that most fall on well-intentioned businesses, due to small, repeated procedural errors. Here are the five most common.
1. Late Registration
Crossing the mandatory threshold without timely registration exposes you to a fixed penalty, and may saddle you with tax for a period you never collected from clients.
2. Inaccurate Returns
An error in computing tax or omitting a supply — even inadvertently — creates a tax difference that carries a penalty. Accuracy in the return is cheaper than correcting it.
3. Mixing Personal and Business Accounts
Commingled funds confuse the tax base and weaken your position at audit, as the boundaries of taxable activity become hard to prove.
4. Neglecting Record-Keeping
The law obliges you to keep records and invoices for a set period. Their absence at audit is both a presumption against you and a standalone penalty.
5. Ignoring Deadlines
Late filing or payment compounds penalties and interest. Deadlines run in business days, so do not rely on the calendar.
Most of these errors are remedied preventively by a periodic tax review before they become a dispute. Prevention is cheaper than litigation.
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