10 Steps businesses need to take to Maintain Tax Compliance in 2022-2023
July 20, 2022
How does tax compliance affect your business? What steps should you take to ensure that you are compliant?
The recent changes in the tax laws have led to a number of challenges for businesses across the country. In particular, the new rules have created uncertainty around how companies should report their earnings and pay taxes. This means that businesses need to be prepared to meet these requirements.
Businesses need to be aware of the new corporate taxation rules and prepare accordingly. They also need to consider whether they need to hire additional staff or purchase software to comply with the new regulations. In this roundup, let’s look at the top 10 essential steps that businesses need to take to maintain compliance in 2022-23 and avoid penalties and scrutiny by the Income Tax Department.
1. Keep Timely, Complete, and Accurate Records
You need reliable records in order to produce accurate financial accounts. Due to the legal requirement for tax conformity, accuracy is essential if you wish to avoid paying severe fines. Maintaining accurate records will not only make filing your tax returns a lot simpler, but it will also make it simpler to monitor the development of your company.
2. Changes in Laws and Regulations
Your company is not automatically compliant. Monitoring, identifying the areas where it affects your business, modifying policy, and executing the changes are all ongoing processes and you must keep an eye out for changing laws and regulations. Keep track of developments and determine which rules and regulations your firm is subject to for your corporate tax planning. When you are prepared for forthcoming changes, you avoid being stressed when new laws are implemented.
3. Schedule Regular Internal Audits
Internal audits conducted on a regular basis are a great way to identify inefficient and ineffective processes that result in noncompliance. Internal audits may concentrate on the company’s financial, operational, technical, or regulatory elements. When examining compliance, an internal auditor’s independence is crucial.
4. Ensure Everything is Updated
Another important end-of-year activity is to ensure that all applicable certifications, licences, and permissions are up to date. Some expire and need to be renewed on a regular basis, even though some may be valid for the duration of your business (provided your business doesn’t change).
5. Evaluate risks
It’s no secret that every company faces risks of some kind. Risk factors might change based on a number of variables. To avoid being caught off guard when an issue arises, it is critical to keep in the know and spot possible hazards. You may prepare for a solution by evaluating the risks. As a result, you will be all set to handle it when or if it arises without having it have an impact on your business.
6. Make Employees Follow Procedures
If employees do not abide by company rules, it has no value. Changes in policy, in particular, may not always be well received by the workforce, and employees may be reluctant to adopt new procedures in their regular workdays. HR must be involved in this procedure.
Above all, make sure to effectively convey corporate policies and processes. Making ensuring they are well-documented and accessible—both physically and digitally—is a part of this. Additionally, make sure that staff members comprehend the rationale behind any changes to policies and procedures. Employee training on how to correctly adjust procedures may also be required.
7. Know your Tax Brackets
Your tax bracket, or the amount of tax you pay on your income, might influence how much income tax you must pay. There are multiple tax-brackets depending on the income a business makes in a year.
8. Deductions and Exemptions
You should be aware of what may and may not be deducted from business taxes. There are multiple deductions that you can claim. It is wise to get in touch with your nearest income tax consultant.
9. Get Some Expert Advice
You might wish to consult an expert if the person you often turn to for tax guidance has any doubts about how they interpret the law. You can discover if someone has a different view of new regulations by speaking with many specialists. If they do, you might need to go above and above to make sure you’re paying your taxes.
10. Get your Account Audited from a Third Party
Make sure that you get your account audited by a third party. This will ensure that you know all your tax liabilities and mismatches in your accounts before the income tax department sends any notice for the inconsistencies.
How Steadfast Business Consulting Can Help?
Steadfast Business consulting has set up a customized compliance program design and support to help comply with regulatory requirements or internal policies of a company. In addition, we also provide invoice review programs to monitor compliance with billing guidelines and develop meaningful legal expenditure analytics as a part of our business tax services.
You may be less willing to make the required adjustments the less prepared you are to adapt to tax rules. Do your best to get ready in advance so that when modifications are required, they won’t seem as tough.
We hope that this brief article on the most crucial steps you can take to ensure that your tax compliance is as it should be able to provide you with some useful information. If you’ve ever struggled with tax compliance, you understand how crucial it is to stay away from. Please feel free to reach out to the team of Steadfast Business Consulting at any time if you’d want to learn more about keeping your taxes in order and where to locate professionals that can assist you.