How to keep your business safe from bad tax advice on social media

The recent upheavals to Companies House, Making Tax Digital (MTD), and other financial regulations have left many business owners feeling lost in a sea of compliance questions.

Not wanting to engage with traditional channels of information, social media can seem like the solution with its ease of access and a host of content that seems to answer any questions you may have.

We want to warn business owners not to trust everything they see on social media without first verifying the information with a trusted professional.

Why is tax advice on social media so dangerous?

Social media is a mostly unregulated space where anyone can make a post claiming to be an expert in something they actually know little about.

Echo chambers tend to form around influencers and this can result in false information getting amplified and repeated until the origin is lost and the lie is treated as fact.

With so many changes to regulations and guidelines happening in such a short space of time, it is no wonder that misunderstandings and false information are cropping up and being spread while people try to make sense of the changes.

Gen Z business owners might be especially vulnerable to this, given their unique relationship with the internet.

Some younger Millennials did have the internet as a consistent presence in their formative years, but Gen Z have grown accustomed to having access to the internet at all times and use it for more things than ever.

While seeking information outside of traditional channels can have its advantages, misinformation thrives in these spaces and can infect the business ecosystem if Gen Z business owners pass it on to their equally confused older counterparts.

How can we improve the quality of tax advice?

A clear understanding of what is coming with the changes provided by trusted experts is the only antidote to this problem.

If you come across any tax advice on social media, it is vital that you verify what you have seen before you act upon it.

This can be done by verifying the credentials of the influencer giving the advice to see whether they are an expert or just someone with a camera.

You can message an influencer if they do not provide their credentials publicly and you should keep a record of any interactions.

This will let you raise the issue with HM Revenue and Customs (HMRC) if you do find that the information is bad.

HMRC take misinformation seriously and is working to remove it as it is viewed as a form of scam.

You can play your part in improving the process by reporting anything misleading you see to HMRC.

What can I do if I already followed bad advice?

You may have noticed that there have been a few high-profile cases of people underpaying their taxes and then blaming bad advice for the error.

This means that if you have fallen for any misinformation around tax filing, you are not alone.

If you are in this position, then you should alert HMRC to the mistake as soon as you notice it.

It is sometimes possible to amend tax returns, but it may be necessary to pay a penalty for wrongdoing.

While the prospect of getting punished might make you keep quiet about the error, you should know that HMRC will spot the mistake before long, and they will be harsher if you did not declare it yourself.

Self-reporting can reduce penalties and also provide you with an opportunity to highlight the influence of the bad tax advice, such that you can protect others from making the same mistake that you did.

On the whole, the best way to avoid making mistakes when filing taxes is to seek the help of a registered, trusted professional.

Our team are here to support you and ensure that you are fully compliant with all of your tax filings.

For tax advice you can trust, speak to our team today!