Filing your Self Assessment tax return doesn’t have to be stressful, but it’s important to note that minor mistakes can lead to penalties, overpayments, or unnecessary complications. In our latest blog, we highlight ten common pitfalls taxpayers face when completing their Self Assessment and tips on how to avoid them.
1. Missing the deadline
Failing to meet the 31 January deadline for online submissions is one of the most frequent and costly mistakes. Missing this date triggers a £100 fine, with additional penalties for further delays.
How to avoid it – set reminders well in advance, and aim to submit your tax return at least a month before the deadline to avoid any unforeseen delays.
2. Failing to declare all income
Taxpayers may fail to declare all sources of income. Have you considered income from rental properties, freelance work, foreign sources, or investments?
How to avoid it – keep thorough records of all income sources throughout the year. Cross-check bank statements, invoices, and any correspondence to ensure nothing is missed.
3. Not claiming all allowable expenses
Many self-employed individuals don’t claim all the expenses they’re entitled to, such as business travel, office supplies, or professional services. This often means paying more tax than necessary.
How to avoid it – maintain a detailed log of expenses and keep receipts. Refer to HMRC’s guidelines or speak to an expert tax adviser to ensure you’re claiming everything you’re eligible for.
4. Making errors
Manual calculations are prone to mistakes, whether it’s working out tax liabilities or VAT adjustments. Even small errors can lead to time-consuming corrections or penalties.
How to avoid it – double-check all figures before submitting, or utilise a professional tax adviser to submit the Self Assessment for you – avoiding any mistakes.
5. Providing incorrect personal details
Incorrect information, such as your National Insurance number or address, can lead to delays or the rejection of your return.
How to avoid it – verify all personal details carefully. Ensure the information matches what HMRC has on record to avoid processing issues.
6. Not reporting capital gains
If you’ve sold assets like property, shares, or other investments, you may need to report capital gains. Many taxpayers forget to include this information.
How to avoid it – review any asset sales during the tax year and calculate potential capital gains. If you’re unsure, speak to a tax adviser to determine what needs to be reported.
7. Overlooking pension contributions
Pension contributions can reduce your tax liability, yet many taxpayers either fail to report them correctly or miss out on tax relief.
How to avoid it – include all pension contributions on your tax return. Check with your pension provider for accurate figures to ensure you claim the full relief available.
8. Not declaring charitable donations
Gift Aid donations can provide additional tax relief for higher-rate taxpayers, but these often go unclaimed. However, non-taxpayers who tick the Gift Aid box may, in fact, face a tax bill.
How to avoid it – only tick the Gift Aid box for charitable donations if you’re a taxpayer and if the tax you will be saving will be more than the tax that the charity can claim back under Gift Aid. Keep records of all Gift Aid donations and include them in your tax return to benefit from the applicable tax relief.
9. Poor record-keeping
Disorganised or incomplete records can lead to missed deductions, errors, or even investigations from HMRC.
How to avoid it – keep detailed and organised records of income, expenses, and other relevant financial documents. Ensure you keep these records for at least 6 years, as required by HMRC.
10. Failing to amend mistakes
If you notice an error after submitting your return, you can still amend it. However, many taxpayers fail to make these corrections, which can result in further penalties.
How to avoid it – regularly review your return after submission. You can amend your return up to 12 months after the original deadline.
Get in touch
Filing a Self Assessment tax return may seem complicated, but being aware of these common mistakes can help you reduce the risk of errors and penalties. Take the time to plan and double-check your submission to save you stress – and potentially money – in the long run.
If you need help submitting your Self Assessment tax return on time, please get in touch by emailing enquiries@pmm.co.uk.
