5 Common Mistakes Found on Self Assessment Tax Returns

Tax return time is a stressful period for most of us. Have I got all the records I need? What if I forget to include something vital? Most crucially of all, have I put enough money away to pay my bill? These are the questions that keep many a contractor awake at night as January creeps to its wintery end.

Making simple, avoidable mistakes on your tax return can cause delays in calculating what you owe – or are owed – and string the agony out for longer than is really necessary.

Here are five common mistakes that you may kick yourself for making.

1. Not declaring all income/Capital Gains

There are severe penalties for failing to declare all relevant income and Capital Gains. For deliberate errors, e.g. omitting a source of income on purpose, you could potentially be prosecuted.

These are the types of income/Capital Gains you need to declare:

• Income from employment
• Benefits including maternity/paternity pay, statutory sick pay, job seekers allowance
• Pension income
• Interest, dividends from savings, bank accounts, building societies investments or Trusts etc.
• Property income
• Foreign income including evidence of tax already paid abroad
• Capital gains
• Employee share schemes
• Dividends

2. Trying to claim expenses that can’t be claimed

There are complex rules governing what expenses you can deduct, and there are costly penalties for incorrect claims.

If you are in any doubt check with your accountant. It’s far better to check these things carefully – some things you may think can be claimed, can’t. But there are also a few things you may not have thought to claim. To help make sure you are being as tax-efficient as possible, please speak to one of our experienced accountants.

3. Not enclosing supplementary pages

For additional income not covered by the main tax return, you will need to include supplementary pages. Additional information which may be relevant includes:

• Interest from gilt edged and other UK securities, deeply discounted securities and accrued income profits
• Life insurance gains
• Stock dividends, non-qualifying distributions or close company loans written-off
• Post cessation receipts
• Income from share schemes
• Lump sums or compensation payments from your employer, or foreign earnings not taxable in the UK
• Taxable lump sums from overseas pension schemes
• Certain employment deductions
• A claim to age related Married Couple’s Allowance
• Other tax reliefs not found in the main part of your tax return
• Loss relief claims
• Income from property

4. Ticking wrong boxes

HMRC frequently pull up tax returns that have had incorrect boxes ticked, or boxes not ticked when they should have been. Having wrong boxes ticked can result in HMRC opening an enquiry into your taxes and can result in a penalty for providing inaccurate information. Having your tax specialist prepare your tax return will help avoid this easy mistake.

5. Missing the deadlines

The deadline for submitting a paper return is 31st October following the end of the tax year.

The deadline for filing your tax return online is 31 January after the end of the tax year. So a tax return for the 2016/17 tax year would need to be submitted online by 31 January 2018.

If you miss the deadline, you will have to pay penalties which increase the longer you delay. We will always send you reminders to send us your information, sign your tax return and pay your liability so you don’t miss the deadlines.

What to do if you do make a mistake on your tax return

If you do make a mistake on your tax return you’ve normally got 12 months from the submission deadline to correct it. This is called an ‘amendment’.

For example, for the 2016/17 tax year you have until 31st January 2018 to file your tax return online. If you subsequently notice that you have made a mistake on this return, you have a further 12 months, which takes you up to 31st January 2019, to correct the error with an amendment.

Our qualified accountants and tax advisors are able to help you complete your Self-Assessment Tax Return and ensure it is correct.

We will also help you to reduce your tax bill as much as legally possible. Particularly if you have lots of sources or complicated income, our experienced accountants and tax advisors can help make sure your tax affairs are handled properly.