None of these are exotic. They are the ordinary errors that appear when a business starts taking payments in something its bookkeeping was not designed for, and they share a property: each one looks harmless at the time and expensive at the year end.
1. Counting your own transfers as income
The big one, and the most common by a distance.
You move four thousand pounds from the wallet the till pays into over to the one you keep as a float. Nothing has been earned and nothing has been sold. But if the books are built by watching wallets receive money, that arrives looking exactly like a customer paying you.
Do it weekly and you have invented a second business. Your revenue is wrong, your VAT is wrong, and your accounts show a company doing considerably better than it is — which is a genuinely unpleasant thing to discover after you have made decisions on the strength of it.
A transfer between wallets you control is a transfer. It should be recorded, and it should never touch the revenue line.
2. Valuing at the wrong moment
VAT is due on the sterling value at the time of supply. Not the average that quarter, not the rate the day you did the books.
That figure exists for about a second. Reconstruct it in January and you have an approximation — close, probably, and undefendable if anybody asks how you arrived at it. Capture it as the payment lands or accept that every number built on it is an estimate.
3. Forgetting that spending is a disposal
Most people accept that converting to sterling is a disposal. Fewer notice that paying a supplier with the asset is one too.
You received it, you held it, you used it to settle a debt. That is a chargeable event with a gain or loss against your base cost, whether or not any sterling was involved. A business paying suppliers directly and never converting anything can still have a full year of disposals nobody has calculated.
4. Picking which units you sold
You cannot. The rules decide for you, in a fixed order: same day first, then acquisitions in the following thirty days, then the Section 104 pool.
The thirty-day rule is the one that defeats spreadsheets, because it is retrospective. A disposal on the 3rd may have to match against an acquisition on the 25th, which had not happened when you did the sum. Every new acquisition can change a calculation you already finished.
It is not a formula. It is a recalculation across the whole history every time something lands.
5. Booking gift cards and credit as revenue
A gift card sold is money taken against goods not yet chosen. It is a liability until it is spent, and the VAT falls at the point of redemption rather than at the point of sale.
Loyalty credit you have promised is the same shape. Booking either as revenue on day one overstates the year, understates the liability, and puts the VAT in the wrong quarter. Breakage — credit that expires unused — releases to revenue on expiry, not before.
6. Leaving counterparties as addresses
Less dramatic, and it is the one that makes everything else take three times as long.
A ledger full of unnamed addresses cannot be reviewed. Nobody can tell whether a payment was a customer, a supplier, a refund or your own transfer, so every question becomes an investigation. Name an address once and it should be named everywhere it appears, backwards through the history as well as forwards.
What these have in common. Every one of them is a recording problem rather than a tax problem. The rules are settled and not especially difficult. What is difficult is capturing enough, accurately, at the moment it happens, across hundreds of small transactions.
Which is why this was never going to be solved by a payments company or by a spreadsheet, and why it is the part of the product that actually matters.
The test worth applying
Whatever you use, ask one question: can your accountant see the working?
Not a total. The dated calculation behind a disposal, the sterling value recorded against a payment with its rate and timestamp, the reason a transaction was classified as a transfer. If those exist, the year end is a review. If they do not, it is a reconstruction, and reconstructions are where the mistakes above become permanent.
Transfers detected, values captured as they land, disposals matched with the working shown. Send it to your accountant before you commit to anything.