By the Book – Protecting You and Your Business
Many businesses operate in good faith only to find out later that they have actually been breaking the law. It may not be dumping poisons into rivers but a simple oversight in terms of tax payments could see you and fellow directors given a garnishee notice. Even if you have been doing it “by the book” for years you have to remember that the rules change and so your company must also.
Tax Law and You
We all loathe the tax man and there is that saying that there are two things in life that are certain – death and taxes. One thing that is not certain is liabilities caused by negligence within a company. A business must stay on top of all the current tax laws by either hiring in house experts or outsourcing.
The taxes your company must pay will change due to a variety of circumstance including:
Profit and Loss – What you earn as a business will affect how much tax you have to pay.
Government Budgets – Government budget announcements usually come with changes to the tax system.
Government Legislation – If the Government passes certain legislation it may affect your business depending on what industry you are in. A good example was the introduction of the Goods and Services Tax that affected all businesses.
Even if understanding tax is not your speciality you can at least get acquainted with the numbers. You will have a specialist accountant or accounting firm looking after your books so you do not usually need to know the exact details. If you have questions about taxes and accounting then always be sure to raise it at a board of directors meeting if you are on it.
Being a Director
Directors of companies are there to do exactly that – guide the company in the good (and bad) times. While there are certain perks to being a director such as:
Allowances – car, travel, phone etc.
Ability to voice concerns about the company.
Control the direction of the company.
These also come with responsibilities that, if you do not do correctly, could result in serious legal action. This can also mean that you, as a director, can be made personally liable for the debts and actions of the business. To avoid getting given a director penalty notice (which is a notice of persona liability) you need to be aware of everything that is happening in the business.
Seeking the Right Advice
If you are unaware of how your company is faring in the marketplace then you need to either investigate for yourself or hire an expert to find out. Whether your company is doing well or is need of a restructure seeking out consultants is the best way of getting an outside view. This will also show if anything is not being done by the book so it can be resolved quickly to avoid any legal implications.