Everyone can make a mistake with the exception of accountants of course! Some mistakes we see over and over again with tax returns, they are simple mistakes to make, and generally simple to fix, so without further ado, here are the 10 most common tax return mistakes, in no particular order.
Tax Return Mistakes #10
Registering with HMRC too late to complete your tax return.
If HMRC have not been informed you are self-employed or need to complete a self assessment tax return, you may not receive your UTR (Unique Taxpayer Reference) in time. It can take several weeks to receive your UTR from HMRC, so if you don’t have one, but will need to complete a tax return, apply online now. https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-self-employed
Tax Return Mistakes #9
Forgetting about the Child Benefit Charge
If you are a high earner, with income over £50,000 and are still in receipt of Child Benefit, be aware you need to include this on your tax return as ” High Income Child Benefit Charge”.
Tax Return Mistakes #8
Something doesn’t look right!
Does your tax return seem reasonable? Are you due to pay lots more tax this year, but your income and outgoings are the same as last year? Have you got no tax to pay, yet you feel like you have had the most successful year to date? If things don’t seem reasonable, there is a good chance you have made a mistake, and you really should check your figures again.
Tax Return Mistakes #7
Forgetting to include all income
It seems obvious that you would include your income onto a tax return? Its all the small things that people seem to leave off, and we don’t think its on purpose for a moment. So to jog your memory, have you included income from investments, such as shares? What about interest you received on that bank account you don’t really use much, it may only be a few £’s, but should be included! Don’t forget the income from any rental property you may have.
Tax Return Mistakes #6
Excluding expenses that could be claimed.
…and conversely including expenses that absolutely shouldn’t be claimed.
This is a really complex area and is well beyond the scope of this article, however, we will try and create a new article which gives some hints and tips on the type of things you can an can’t include, so keep checking the website for that.
Its important to realise, it is not HMRC’s responsibility to check through all your expenses, working out which ones are valid and which aren’t, you need to be aware of the rules, and apply them to your tax return.
There are hefty penalties for getting this bit wrong, so if you are not going to use an accountant, it will pay to spend some hours doing your research.
Tax Return Mistakes #5
Not keeping good records
Whatever you put on your Tax Return On-Line or by post, you need to be able to prove it. Over the last few decades, HMRC have reduced the amount of tax inspectors they employ, Self Assessment played no small part in this. Previously you may have spoken to your tax inspector directly, now you might only hear from a tax inspector if you are under investigation.
HMRC currently state you need to keep records for 5 years after the submission deadline. For example, for the 2018/2019 tax year, submission deadline is January 31st 2020, you would need to keep records until 2025.
If you have received notification from HMRC you are being investigated, don’t panic, however it could be time for action! If you have any doubts about your tax return, speak to a professional, their knowledge could save you many sleepless nights, and lots of money.
Tax Return Mistakes #4
Getting your NI or UTR wrong
Your NI or National Insurance number (also sometimes referred to as NINO by HMRC) should be made up of 9 letters and numbers. Your NI is number used to track any National Insurance Contributions you have made since you received your NI number (usually when you were 16 years old).
The UTR number or Unique Taxpayer Reference number is a 10 digit number HMRC have assigned to you. All correspondence from HMRC should include this number somewhere, and as the name suggests, is unique to you.
Any errors with your NI or UTR numbers can cause a delay processing your tax return, and in some cases we have seen, can cause you to start receiving penalties even though you have submitted your return!
Tax Return Mistakes #3
Not correcting mistakes straight away
If you have made a mistake with your tax return on-line or by post, you should inform HMRC as a matter of urgency. In most cases, you can correct mistakes up to 12 months after the filing deadline, so do not delay.
Tax Return Mistakes #2
Didn’t include the supplementary pages
If you are submitting your tax return on-line, this doesn’t really apply to you as the correct sections of the tax return should open to show you which supplementary information needs completion.
If you are submitting your tax return by post, you are highly likely be required to submit supplementary pages. If you need some help with this, we have published a walk-through guide to submitting your tax return on-line and by post.
Tax Return Mistakes #1
Missing the deadline
Of course our number 1 tax return mistake had to be the most common, most easily avoided mistake of all – missing the submission deadline!
If you are submitting your tax return on-line, you need to complete by midnight on the 31st January following the April 5th end of year.
If you are submitting your tax return by post, you need to have it in the hands of HMRc by 31st October following the April 5th end of year.
Taking April 6th 2018 to April 5th 2019 as an example:
You need to submit your tax return on-line before midnight January 31st 2020.
You need to submit your paper tax return to arrive on or before October 31st 2019
However you submit your tax return, you will need to settle your tax payment by January 31st 2020
Tax Return Mistakes
I hope you found this guide useful, however it cannot take the place of professional advice given from your accountant, and we do not take responsibility for any errors in this document, and do be aware, things may have changed since this document was written. If you have any questions or need help with your tax return, please contact us.