6 expensive self-assessment mistakes to avoid
When dealing with your Self-Assessment tax return, it’s easy to make mistakes. Some of the most common self-assessment mistakes though, can be a little too easy to make. If you want to avoid making any mistakes with your self-assessment moving forward, we recommend that you try and avoid any of the following mistakes.
While the rules are prone to change with every government, the following rules tend to be staples of Self-Assessment taxation. So, what are some of the most common self-assessment mistakes that you might make? What do you need to do if you wish to avoid these particular issues?
Failing to date and sign
The first yet most damaging self-assessment mistake is that you fail to date and sign your self-assessment return. If you are still someone who does all of your submissions by paper, then you will need to rush to beat the 31st October deadline. However, if you do manage to beat the deadline, don’t mess up your good work by forgetting to date and sign your self-assessment form!
With the wrong government employee looking over your case, you could have your whole tax return invalidated, meaning you may need to re-submit your return. If you are using an accountant (recommended), then they can confirm the regularity – and damaging penalty – of forgetting to sign and date your tax return.
Working with the wrong tax codes
One of the most common errors that you might make when dealing with your self-assessment tax return, is using the wrong tax code. The government believes that thousands of tax payers are paying the wrong amount – too much or too little – due to being under the wrong tax code.
You can check your tax code on your tax return – it’s normally a 4-digit code followed by a letter. If this matches up with your payslip, then you are fine. If not, you could be due a sizeable tax repayment – so don’t wait around, take a look at the tax code as it could be seeing you pay a lot more than you should.
Forgetting to include interest on all income
One common mistake that is made when dealing with self-assessment is failing to include interest on all of your income. If you receive interest from a bank or building society, then you need to include this as part of your income. Gather up all of your documents for things like savings and investments, and then work out the interest gathered in the relevant tax year.
Any interest earned from a loan, any kind of credit union or society accounts will be counted as part of this. You should do what you can to look around and make the right decisions on what would count as interest for you.
Claiming incorrect/ineligible items
When setting up your claim with HMRC, one of the most common self-assessment mistakes is that you will make a claim on an item you shouldn’t. Preparing your taxes often means doing it all in a few sittings, meaning that you are looking over old receipts etc. that you might not be able to remember the full context.
We recommend that you work with an accountant for this, as they can help you to notice what can and cannot be claimed within your industry. As ever, make sure they have industry expertise for your profession as it increases the chance of your accountant being accurate in terms of what can and cannot be claimed.
Lack of supplementary information
If you need to give HMRC any other information about your self-assessment tax return, then forgetting to include such information will be harmful. For example, if you bring in any supplementary income outside of your main tax return, then you will need to include things like:
Life insurance benefits or gains.
Interest from any UK security or accrued income profit exercises.
Dividends from any stocks that you own, including loan write-offs.
Business income receipts which was taxed as income in the previous year(s).
Any kind of tax relief scheme such as a Venture Capital Trust scheme.
Failing to include these is one of the most common self-assessment mistakes that can cost you a lot of time and effort correcting the mistake.
Forgetting to file
For one, you need to actually remember to file your Self-assessment return!
That might sound off, but some people simply forget to actually put through their tax return before the deadline. You will see yourself hit with a significant penalty fine if you don’t manage to get your self-assessment tax return handed in on time.
This will mean that you could pay anything from £100 right up to the 100% value of your tax bill – meaning that you essentially will need to pay your tax bill twice. This is why it helps to work with a tax expert to help avoid such mistakes. Hiring a tax expert who can help you to manage your books and avoid self-assessment mistakes is always beneficial. At Devonshire Green, we can help you to avoid falling down any of the traps above – including this most crucial yet easy to manage mistake or failing to file your tax return. Contact us today if you want to make sure you don’t fall foul of the self-assessment mistakes we have mentioned.