Easier Tax Filing for Smaller Companies and Startups | Article – HSBC VisionGo
IR56B, namely Employer's Return of Remuneration & Pensions, is a form employers have to submit to the Inland Revenue Department (IRD) within 1 month from the date of issue of BIR56A. Normally, together with the form of IR56B, BIR56A will be sent to the employer by IRD on the first working day of April.
As a result, April can be a real headache for some companies, especially startups that do not have a big team, or a proper or capable accounting team to support on the payroll. You might frantically dig through piles of papers to look for the documentation you need to prepare for your tax return. We have even come across some startups that reached out to their former employees for the validations of salaries. Imagine the number of employees you have for the year, it might be a time consuming and chaotic procedure. And it is not surprising to come across incorrect information from time to time. Here's a piece of information for you: companies will be fined for filing incorrect Employer’s Tax Return & handing in the filing late.
Offenders are liable on conviction to a fine of HKD10,000, as well as a further fine of three times the amount of tax which has been undercharged.
How to make tax filing easier?
Firstly, It is important to have proper accounting and financial records. Companies should keep all records organized in one place to ensure not to miss any tax deductions or tax credits.
Secondly, since startups usually do not have a sufficient company size to hire a dedicated person to manage the payroll and those records, many companies choose to outsource their payroll services to a payroll company. Many payroll companies provide a solution to automate the payroll process, or even to generate the tax filing automatically through the system.
Benefits far more than making tax filing easier
Not only does it make your tax filing easier, outsourcing your payroll operation can also have the following benefits.
Helps you reduce costs
Hiring an in-house professional to manage payroll can be costly, especially if your business has less than 30 employees. You can easily save money by outsourcing your payroll operations. Processing payroll in-house means investing in the necessary computer equipment, payroll or accounting software, and training to ensure that the payroll is processed correctly.
Refocus your time
Having professionals do the tax filing for you, you can refocus the time on your core business. By freeing up your time, you can keep your eyes on the business growth.
Most of the payroll outsource providers are well trained and are equipped with professional payroll software, this will vastly reduce payroll errors. Additionally, employers will be up-to-date on the changes in tax rules and statutory requirements, as payroll companies can share those information to enforce company compliances.
Peace of Mind
Having so many more matters to do within the company, companies tend to rush to file taxes just before the deadline. And not filing your tax return on time? You may face penalties, or even, prosecution. Passing the work to a trustworthy service provider can save your time and reduce your time crunch.
If you don’t want to have the same nightmare in preparing your tax filing next year, it’s time to think about outsourcing your payroll to a professional service provider. Techlinker Asia provides professional payroll outsourcing services in Hong Kong & Singapore and we are here to help you.