What are the most common mistakes of corporate taxpayers?

Most of the corporate taxpayers make two mistakes.

Poorly maintained accounts and consequential understatement of income

It is one of the most common mistakes of corporate taxpayers. It is every business’s obligation and duty to maintain proper accounting records for all the revenue and the invoices raised for sold goods and services. When some of the receipts or issued invoices are omitted, it makes an understatement of the income. It is a severe offense.

Taxpayers must issue invoice receipts that are serially numbered with respect to the sold goods and rendered services. They should provide proper invoicing to support these receipts. All the receipts must be carefully accounted for when they prepare accounts.

Try to claim a deduction for non-deductible expenses

Many corporate taxpayers try to claim a deduction for expenses that are not related to business. Such expenses include a director’s private expenses like going for a vacation, entertainment expenses, and expenses for other personal purposes. Companies must segregate such expenses and do not include them in the claims.

Motor vehicle expenses of business service passenger vehicles (Q plate cars) and private-plate cars (non-Q plate cars) cannot be claimed for deduction. Such claims include:

• Petrol expenses
• Insurance
• Repair and maintenance
• ERP (Electronic Road Pricing) charges
• Parking fees
• Hire purchase

Even if these expenses are incurred in the course of business, they are not deductible and should not be claimed.