The Worst Accounting Advice We See Online (And What You Should Actually Do Instead)

The internet is full of accounting advice, and unfortunately, a lot of it is completely wrong. From social media “gurus” to well-meaning friends, many business owners end up following tips that put them at risk of penalties, enquiries, or unexpected tax bills.

Bad advice spreads fast, and it can cost you real money.
So here are some of the worst accounting tips we see online and what you should be doing instead.

Bad Advice 1: “Just claim everything as a business expense, HMRC will never know”

What people think:
If you spend money while running a business, it must be deductible.

The truth:
HMRC are stricter than ever. If an expense has any personal element, or if it is not wholly for business purposes, you cannot claim it in full.

What to do instead:

• Claim only genuine business expenses

• Split mixed use expenses sensibly

• Keep clear records and receipts

• Get clarity before claiming anything questionable

Incorrect claims can lead to repayments, penalties, and enquiries. It is simply not worth it.

Bad Advice 2: “You don’t need an accountant, just use software and guess the rest”

What people think:
Software does everything for you.

The truth:
Software helps you keep records, but it does not tell you how to save tax, how to structure your income, how to avoid penalties, or how to comply with HMRC.

What to do instead:
Use software, but get support from a professional who understands tax law. A single mistake on a tax return or VAT return can cost far more than paying an accountant to do it properly.

Bad Advice 3: “Put everything through as dividends. It’s cheaper”

What people think:
Dividends are always the most tax efficient option.

The truth:
Dividends can be tax efficient, but they must be paid correctly and only from available profits. Paying dividends without profit or without paperwork can cause serious issues.

What to do instead:

• Take a proper blend of salary and dividends

• Keep minutes and vouchers for every dividend

• Make sure the company has enough profit first

• Review your tax strategy each year

Bad Advice 4: “You can ignore HMRC letters, they’ll go away”

What people think:
It is probably a mistake.

The truth:
Ignoring HMRC is one of the fastest ways to get into trouble. Letters escalate quickly into penalties, interest, and potential investigations.

What to do instead:
Open every HMRC letter as soon as it arrives and deal with it promptly. If you are unsure, ask your accountant to check it for you.

Bad Advice 5: “If you’re not VAT registered, you don’t need to track your turnover”

What people think:
VAT only matters once you hit the threshold.

The truth:
VAT applies the moment you cross £90,000 in any rolling 12 month period. If you miss it accidentally, HMRC can backdate your VAT bill.

What to do instead:
Track your turnover every month. Even if you are nowhere near the threshold, it protects you from accidental late registration and unexpected tax bills.

Bad Advice 6: “You don’t need to file if you made no profit”

What people think:
No profit equals no tax, so no filing.

The truth:
Limited companies must file accounts and returns regardless of profit. Directors who take dividends still need Self Assessment returns too.

What to do instead:
Always file on time. Even zero returns must be submitted or you risk penalties.

Bad Advice 7: “Cash is untraceable, you don’t need to declare it”

What people think:
Cash payments fly under the radar.

The truth:
HMRC have increased data access, technology, and industry checks. Cash heavy industries are already a major focus. Failing to declare income can lead to severe penalties and even criminal consequences.

What to do instead:
Declare all income, including cash. Staying compliant protects your business and your reputation.

The Bottom Line

There is a lot of terrible accounting advice online, and following it can cause far more harm than good.

The safest approach is simple:
If something sounds too good to be true, it probably is.

If you ever want to sense check advice, avoid unnecessary tax bills, or get clarity on how to handle your numbers properly, send us a message or book a complimentary discovery call. We are here to help you stay compliant, confident, and in control.

Meet Lewis

Lewis is a professional accountant and founder of Rhombus Accounting. He regularly shares his knowledge and best advice here on his blog and on other channels such as LinkedIn.

Book a call today to learn more about what Lewis and Rhombus Accounting can do for you.