According to HMRC over six million people will leave it until January to complete their self-assessment tax return ahead of the 31st January deadline, however, leaving it until the last minute means individuals are more likely to complete their return in a hurry and risk making mistakes…..
The introduction of online filing has made the tax return process much easier as calculations are done automatically and there is on-screen help to assist you if anything is unclear. However, it is still easy to make mistakes, we list the ten most common errors below...
- Missing deadlines or getting your tax year dates wrong
One of the most common mistakes made is with tax dates. The most critical date to know is the 31st January. This is the deadline for submitting and filing of your online tax return and also the deadline for paying any tax owed for the past tax year.
It is also important to know the dates you are reporting. The tax year runs from 6th April until 5th April so for the current 14/15 tax year the date range you need to report on is 6th April 2014 – 5th April 2015.
- Don’t leave out income
Omitting a source of income is a common mistake, often because individuals are unaware that they need to include interest received from a bank, building society or other savings accounts (with the exception of ISAs).
Be aware that if you have received a payment protection insurance (PPI) compensation payout this must also be declared along with any interest included in the payment. You must also declare dividends from UK companies, open-ended investment companies and investment trusts.
It is important that you include all sources of income. If it is deemed you have omitted the information on purpose, you could potentially be prosecuted.
- Gross vs Net
Many people mix up gross and net on their tax return. The gross amount is the amount before expenses, for example your wages or interest amount before tax or other deductions are made. The net amount is the amount you receive after all deductions have been made so double check your figures before you enter them…
- Completing all necessary pages and pressing submit!
Another common mistake is failing to complete all necessary pages of your tax return. Specifically people often leave out PAYE information but this is essential for the return to be accepted.
Make sure to also press the ‘submit’ button at the end. Surprisingly this is a step many people fail to do.
Although tax returns focus on numbers, any misspelt words will cause problems - specifically names. This is often a problem for people who change their name (e.g. those recently married) if they don’t inform the HMRC their personal details have changed. You can do this online or by filling out a P85 form.
- Incorrect National Insurance Number and Unique Tax Reference (UTR)
It is important to make sure both number are correct. Your UTR is a 10 digit reference number which can usually be found on correspondence with HMRC.
Both your National Insurance Number and UTR are unique to you so it is important to include them on your tax return, and make sure they are correct.
- Claiming expenses
If you are self-employed you can claim business expenses against your income but it is important you know what are allowable expenses so you don’t claim too much, or too little.
As a general rule if expenses are exclusively related to your business, you are usually allowed to claim them against your income. For expenses that are used for both personal and business purposes, you can only claim a percentage of the usage.
- Being on the wrong tax code
It is important to check that you are on the right tax code. Every year thousands of tax payers pay too much (or too little) tax as a result of being on the wrong tax code.
Your tax code can usually be found on your pay slip or P60, and is normally three digits followed by a letter.
To check you are on the right code try moneysavingexpert.com’s free online code checker
- Incorrect figures
Double check all calculations, entering the wrong figures may result in you paying the wrong amount of tax.
- Forgetting to pay your taxes!
The worst mistake you can make is to forget to pay your taxes before the installment deadlines. As well as submitting your tax return by 31st January you must also pay any tax you owe by this date. If you miss the payment deadlines you will be charged a penalty that will accumulate over time.
What to do if you make a mistake on your tax return
If you make a mistake on your tax return you have up to 12 months from the submission deadline to make any corrections. This is known as an ‘amendment’.
Help with your taxes
Don’t be put off by the above; let us help you with your taxes instead.
We offer fixed rate fees for the completion and submission of personal tax returns, and what’s more, if you a member of Equity, Spotlight, Casting Call Pro, Directors UK and Actors Centre members we offer you a 25% discount on our services.
Contact us today to find out more, or to make a start on your 14/15 return
We leave the creative work to you so why don’t you leave your taxes to us?