Common Self-Assessment Tax Return mistakes

If you need to submit a Self-Assessment Tax Return (SATR) you must get it in on time and free of any mistakes.

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There are penalties for not submitting your tax return on time and you may have to pay a fine if HMRC deem you have not taken enough care in completing it.

Paper tax returns need to be filed with HMRC by 31 October and tax returns submitted online by 31 January. So, if you complete your tax return online, you get a few extra months.

Common tax return errors

There are a number of common tax return mistakes that can hold things up (potentially leading to a penalty fee), cause you problems or even prompt HMRC to look more closely at you. So it’s best to be aware of them and make sure you avoid the mistakes.

Incorrect figures

Always double-check your calculations to ensure you pay the correct amount of tax. Any deliberate wrongdoing can result in prosecution.

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 that must be declared:

·   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

However some items can be excluded from your Tax Return income, including:

·   Interest or dividends or bonuses from tax exempt investments (e.g. ISAs and National Savings & Investments Savings Certificates)

·   Interest and terminal bonuses from Save As You Earn schemes

·   Premium Bond, National Lottery and gambling prize winnings

·   Interest awarded by a UK court as part of an award of damages for personal injury or death

Claiming incorrect expenses

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

You must ensure you check these things carefully. There are some things you may think can be claimed but they can’t. Checking can determine that there could be claimable expenses that you were not aware of.

Signatures & dates

If you are submitting a paper return, make sure you sign and date it before you send it in. Photocopies will not be accepted. This is a simple mistake, but people do forget to sign their tax returns.

National Insurance number and incorrect UTR

These need to be correct. The UTR (Unique Taxpayer Reference) is a ten-digit reference number unique to you that will be on any correspondence you receive from HMRC. It’s important to include these and to get them right.

Enclosing supplementary pages

For additional income not covered by the main tax return, you will need to include supplementary pages. Additional information that 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

To follow/ as per.

HMRC does not accept information like this. Include all the information that’s needed where it’s needed and when it is needed. Everything should be submitted together. Don’t expect the HMRC to sift through you information to glean the relevant data.

Check the boxes you tick

Use the guide HMRC includes with your tax return to help you. It’s very clear and takes you through the process step by step.

Deadlines missed

·   The deadline for submitting a paper return is 31 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 that increase the longer the delay.

Good record keeping

You need to keep proper and complete records. Below are the records you need to keep in order complete your tax return. Not all may be relevant to you.

·   P60, P45 and P11D

·   Expense records

·   Benefits including maternity/paternity pay, statutory sick pay, job seekers allowance

·   Pension records

·   Bank statements

·   Property income

·   Foreign income including evidence of tax already paid abroad

·   Capital gains

·   Employee share schemes

·   Student loan payments

If you are self-employed you will need to maintain business records such as:

·   Cash books

·   Invoices

·   Mileage records

·   Receipts

·   Bank statements

·   Records of all sales and takings, purchases and expenses

·   Money taken out of business for personal use (if any)

·   Personal money put in to the business (if any)

If you happen to make a mistake on your tax return you have normally got 12 months from the submission deadline to correct it. This is known as an ‘amendment’.

Using a self-assessment software provider can assist in ensuring that the information is correctly inputted when completing your Self-Assessment Tax Return.