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Seven mistakes people make when completing their own self-assessment

Filling in your own self-assessment tax forms is complex, and mistakes can easily be made.

1. Bad maths

Any calculations you make when filling in figures on the tax return must be accurate. Calculations need to be checked so that you pay the right amount of tax. Any deliberate miscalculations can result in prosecution.

2. Not declaring all income

All income must be declared, not just that from a business. Taxable income includes that from property, capital gains, share dividends, pensions, foreign earnings, state benefits, and interest from investments and savings.

There are some income sources that are exempt from tax and do not have to be declared on the self-assessment form. These include winnings from gambling or lotteries, and interest on damages awarded by UK court such as personal injury and death awards.

3. Claiming for disallowed expenses

If a person runs a business or is self-employed as a freelance worker, there are lots of expenses that can be claimed for. The rules about what can and cannot be claimed for are complex. If you claim for an allowance that is nondeductible, and this is discovered by the tax authorities, there can be costly penalties.

The opposite can happen too, where legitimate expenses are not claimed for.

4. Ticking the wrong boxes

With so many boxes that need ticking on the self-assessment form, it’s easy to tick the wrong one and provide incorrect information. Tax forms need to be checked carefully to make sure that the correct tick boxes are filled in.

5. Missing the deadline

The deadline for submitting paper self-assessment forms is October 31, after the end of the tax year. For online returns, the deadline is January 31, following the end of the tax year. Missing the deadline results in an automatic fine. Fines increase the longer a person delays filling in their self-assessment forms.

6. National insurance and taxpayer reference

If the wrong national insurance number or wrong tax reference number (UTR) is filled in, HMRC may believe that the tax form has not been submitted.

7. ‘To follow’

If you do not have all the information that the tax authorities need, it may be tempted make a ‘to follow’ note, thinking that this will be fine for the HMRC. Sorry, but this is not acceptable – HMRC wants all information be submitted at the same time.

What should I do if I make mistakes?

If a person finds that they have made mistakes on their tax return they can submit an amendment report to correct the mistakes. This must be done within 12 months of the form submission.

How to avoid mistakes

The best way to avoid making mistakes on your self-assessment forms is to hire an accountant who will make sure that the self-assessment tax return is correct. They will advise you on legal ways to reduce your tax bill. What’s month, they will know the rules on what expenses to claim for and help you accurately calculate all sources of taxable income.

Posted by Mark
September 3, 2018

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