With Christmas just around the corner, it’s easy to forget that the self-assessment tax return deadline is looming ominously just over the horizon. With many people rushing to complete their returns very close to the January 31st deadline, small mistakes are common and can prove extremely costly. While our experienced tax team would be delighted to take care of your tax return on your behalf this January, we take a look at 5 common tax return mistakes you should avoid should you choose to complete your tax return yourself.
1) Missing the deadline
This might seem an obvious one, but it’s more common that you might think. Penalties for missing the 31st January deadline can be anything from a £100 fine to 100% of the tax bill (although these fines can be appealed if you have a ‘reasonable excuse‘).
2) Pensions information incorrect.
Pay money into a pension? You’ll need to make sure you’re entering those contributions onto your tax return for the right amount and in the correct box. If you make a mistake here, you could either miss out on tax relief or claim too much (in this case HMRC could charge you interest on your underpayments)
3) Getting your Unique Taxpayer Reference or National Insurance number wrong
Increasingly, life is a series of passwords and codes, so it’s not all that surprising that people get this one wrong. Check previous payslips if you are not sure about your National Insurance number and check previous correspondence from HMRC to find your Unique TaxPayer Reference code.
4) Claiming for the unclaimable.
There are hefty penalties for claiming incorrectly and evidence suggests that HMRC’s attitude towards incorrect claims is hardening,with the taxman increasingly likely to believe incorrect claims are deliberate rather than honest mistakes. Check with your accountant or tax advisor to be sure you are only claiming as appropriate.
5) Lazy Form Completion
HMRC will not accept notes such as “info as per accounts” or “information to follow”. Information must be fully completed and supplementary pages must be attached where appropriate. If you have an additional income, whether it is from property investment or your part-time gig as a magician, this must be included on the supplementary pages.
What to do if you do make a mistake on your tax return
In the unfortunate event that you do make a mistake on your tax return, you will normally have 12 months from the submission deadline to correct it. Your bill will be updated based on what you report. You may have to pay more tax or be able to claim a refund. Hiring an accountant or tax advisor will ensure that your tax assessment is submitted correctly