Many individuals choose to file their self assessment tax returns without the help of an advisor. Below are the most common mistakes made by people filing their returns.
An easy error to make is to not file your self assessment at all. A number of individuals fail to submit their return on time every year. Click here for more information about penalties for non filing.
LATE PAYMENT OF TAX
As well as filing on time you must pay your liability by 31 January. Also, it’s important to remember that for some individuals, payments on account are due. These can come as a surprise to some. If you don’t pay in time you will be charged interest and fined by HMRC.
REMEMBER TO SAVE FOR PAYMENTS ON ACCOUNT
There are certain circumstances where payments on account are due for next years tax. Remember to save for these amounts!
Also remember that you may have paid payments on account already in the previous tax year!
REGISTERING TOO LATE
HMRC say an individual must register for self assessment by 5 October after the end of the relevant tax year. For example, for the tax year 2017/2018 you must have registered by 5 October 2018.
You must register and receive your 10 digit Unique tax payers reference in order to file your return. This can take weeks for HMRC to provide. Make sure you register well in time in order to avoid late submission penalties
LEAVING OUT INCOME
All income earned during the year must be declared on your return. This includes minor elements such as bank interest but also extends to other income such as rental profit.
Be sure to take care to include all of your income on the return. Failure to do so can lead to fines and penalties based on the outstanding tax.
NOT CLAIMING RELIEFS
Relief is available to individuals who pay into their personal pensions and give money to registered charities. Be sure to include these even if they are small amounts. Every little helps!
TAX CODES AND OVER/UNDERPAYMENTS FROM PREVIOUS YEARS
Its important to make note of your tax code changes and any underpayments or overpayments made in the past. These will affect how much tax you’ve paid at source and can skew your figures.
NOT KNOWING YOU HAVE TO FILE A RETURN
There are many different reasons why an individual should register and file a self assessment return. Not just if you’re self employed and running your own business.
Claiming the correct amount of expenses in your self employment is important. Click here for more information on which expenses you can claim.
Filing your own tax return seems like a good idea, saving money on professional fees. However, the help of an experienced advisor will save you time and money in the future. Don’t be penny wise and pound foolish.
Contact us today to see how we can help you file your self assessment return.