How Poor Bookkeeping Nearly Cost a Business £10,000 in Corporation Tax
Choosing the cheapest accounting option might seem like a smart way to save money—but sometimes, it costs far more in the long run.
A new client contacted us, concerned about a £10,000 corporation tax bill he had received. He was convinced it was too high and asked us to review the work done by his previous accountant.
A Quick Review Uncovered a Costly Mistake
We reviewed the bookkeeping spreadsheet and quickly spotted the issue: the sales figures had been double-counted.
The previous accountant had recorded the income once when the invoice was issued, and again when the payment landed in the bank. As a result, the client’s income appeared much higher than it actually was—which directly inflated his corporation tax bill.
The Consequences of Cheap Accounting
Why did this happen? The client had chosen a low-cost accounting service that asked for all his paperwork in an envelope—charging just £50 per month. On the surface, it looked affordable. But the lack of attention to detail came with a steep price tag: £10,000 in unnecessary tax.
Fortunately, we stepped in and made the necessary adjustments. After correcting the bookkeeping error, we helped reduce his tax bill back to what it should have been—saving him the full £10,000.
The Value of Accurate Bookkeeping and Expert Review
This case shows how inaccurate accounting can directly impact your corporation tax bill. Bookkeeping might seem like a back-office task, but when done incorrectly, it affects everything—from cash flow to HMRC compliance.
That’s why working with experienced professionals who understand the bigger financial picture is so important. We don’t just record numbers—we make sure they’re accurate, timely, and aligned with your business goals.
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