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Displaying items by tag: tax issues

Friday, 31 August 2018 14:38

Corporate Tax Mistakes You Should Avoid!

  1. If you registered a limited liability company with the Corporate Affairs Commission and you opened a corporate bank account for it, and you are using that corporate account for personal transactions, you risk having tax issues with the FIRS (Federal Inland Revenue Service).
  2. When FIRS notices the account, they will ask you to account for all the money that passed through it. They will ask you for different kinds of accounts - Financial Accounts,  Management Accounts, etc. You will be expected to show your VAT payments as well.
  3. If, as usual, you claim that your company did not do any business during the period, they will not believe you because there are transactions in the company's corporate account.
  4. So if you have a company registered and you do not use it, do not open a bank account yet or if you do, do not do personal transactions with it. Transact personal matters with just your personal accounts. That way, you only have PAYE (Pay As You Earn) to worry about with your State Government.
  5. If you must have a Business, why not start small by registering a Business Name? You can have your corporate bank account but you will not have any business with FIRS - just your state Internal Revenue Service.
  6. Because of BVN (Bank Verification Number), any corporate account can be traced back to the owner or owners, who will then have to account for all monies that passed through that account. Do not transact personal business with your corporate accounts. If an uncle abroad sends you N2m to buy a car, do not receive it with your corporate account. Receive it with your personal account. And so on.
  7. If you want to start a small business, just register a Business Name; not a limited liability company. When you grow big enough, you can then go corporate!

If you stick to these simple tips, you'll save yourself from avoidable tax issues in the future!

Stay Smart, Wealthy and Wise!

       Jay Onwukwe

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