One of the great difficulties we face as accountants is providing clarity to our clients amongst all the misinformation, rumours and hearsay floating around out there.
The issue of misinformation is particularly prevalent in the accounting industry, this is because there are so many rules and regulations that businesses must abide by that are constantly changing. The problem is (and we’re nearly all guilty of this) is that we place an unfounded level of trust in the inexpert advice of our friends, family and peers.
But Dave from your local is a top bloke and would never lead you astray, right? Not intentionally, of course. There is a strong likelihood that Dave’s intentions are good and that he’s giving you information he believes to be correct, and maybe it is, but it is just as likely that it’s outdated or just plain wrong.
It is bad practice to make key business decisions based on the advice of someone unqualified and inexperienced. It is essential that before making an important decision about your business or finances, you seek advice from a professional. There are many instances of people taking the well-meant advice of friends and landing themselves in a spot of bother.
The consequences of taking non-professional advice can be severe, even resulting in hefty fines. For example, you get talking to a woman named Margaret in the supermarket and she tells you that you don’t have to charge your customers VAT because you’re a sole trader, and sole traders don’t have to charge VAT. She knows this because her husband was a sole trader and he never had to charge VAT.
Just because Margaret’s husband never had to become VAT registered, doesn’t necessarily mean you don’t. Sole traders must register for VAT if they turnover more than £85,000 (correct at time of writing), just like limited companies. Perhaps Margaret’s husband never breached that threshold and therefore never had to. Also, as stated before, rules and regulations are constantly changing. The VAT threshold today is far different to what it was 20 years ago for example.
The point of this blog is to urge you not to act based on unsubstantiated advice, it’s simply not worth the risk. You should only ever make business decisions based on accurate, specific and up-to-date information – the information only a professional can provide.
If you’ve heard something from someone you’re not sure about, get in touch, we’re more than happy to help.