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The Self Assessment Tax Return (SATR) date is looming; by January 31st, you will need to submit your return online. The deadline for paper tax returns was October 31st. If you are yet to file your Self Assessment Tax Return, make sure you read this post before doing so. We will reveal some of the common mistakes that are made so that you can avoid them. Remember, mistakes when it comes to your tax return can be very costly. If HMRC feel you have made an error on purpose in an attempt to avoid paying tax, you could find yourself in huge trouble. Even if they realize it was a genuine mistake, you could still be fined for being careless. So, it is really important to make sure you avoid the mistakes discussed in this blog post.
Improper record keeping – This is one of the biggest mistakes people make when it comes to their Self-Assessment Tax Return. Throughout the year, they have failed to keep their records, and so this makes the tax return process an extremely difficult one. There are lots of ways you can track expenditure and keep effective records depending on the nature of your business. TripLog is good for businesses with transport, making it easy to track mileage for tax requirements. There are lots of other useful tools of this nature. Moreover, once you send your tax return, you need to keep a hold onto such records encase HMRC come calling. This includes the likes of student loan payments, employee share schemes, invoices, capital gains, bank statements, pension records, expenses records, P11D, P45, records of all sales and takings, and much more.
Missing the deadline – One of the biggest mistakes you can make is missing the deadline. As mentioned, you have until January 31st to submit your application online. If you usually submit paper applications, you have missed the deadline by several months, and, therefore, you will have to do your return online this year. Missing the deadline can result in penalties, meaning you will cost your business unnecessary money.
Claiming expenses that cannot be claimed – A lot of people are unaware of what can and cannot be claimed. There are complex rules in place, which is why it is always a good idea to seek the help of an accountant. If you try to deduct something that cannot actually be claimed for, you will find yourself facing costly penalties.
Failing to declare all capital gains and income – If you do not declare capital gains and all relevant income, you will also face huge penalties. If you have done this on purpose, you may even be prosecuted. Therefore, make sure you include all of the following – employment income, dividends, employee share schemes, capital gains, foreign income, property income, interest, dividends from savings, pension income, and benefits.
Failing to enclose supplementary pages – When it comes to any additional income that is not covered by the main Self Assessment Tax Return, supplementary pages must be included. Examples include the likes of loss relief claims, taxable lump sums from any pensions overseas, stock dividends, life insurance games, and interest from UK securities.
Not hiring an accountant – Last but not least, a chartered accountant is worth their weight in gold when it comes to tax returns. They can make sure you are making the most of any tax deductions while also giving you the peace of mind that your tax return is filled out correctly, and everything is being handled above board. The last thing you want to do is end up on HMRC’s bad side and face a substantial fine because of a simple human error. By taking advantage of a fixed fee accountancy service, you can make sure that this never happens.
So there you have it: some of the most common mistakes people make when it comes to their Self-Assessment Tax Return. If you can avoid the errors that have been discussed above, you can give yourself a great chance of ensuring your tax return is filed successfully and that you never have to worry about it again once it has been submitted by the end of January.