5 common mistakes on self-assessment returns
As the 31 January deadline looms for self-assessment and submission of individual tax returns, we think about five common things that could go wrong.
1. Getting your tax code wrong
It is important for you to ensure that your tax code is up to date. Sometimes there can be a difference between what you think it is versus what HMRC think it is. The tax code on your payslip can also be different to what HMRC thinks it is sometimes! Inaccuracies here can lead to time and effort wasted in adjusting prior year submissions and potentially informing HMRC of underpaid tax for those periods, which can prove to be costly when they add on interest.
2. Incorrectly claiming business expenses
Remember that expenses are only tax deductible if they are considered as wholly and exclusively used for the purposes of your business. Unfortunately, claiming a Spotify subscription on the basis that you need music to work is not a valid business justification!
3. Poor bookkeeping
Leaving the bookkeeping to the last minute is always going to result in a subs-standard submission, as you will be spending so much more time gathering documentation rather than focussing on getting the submission right. We recommend leaving the bookkeeping to a local accountant.
4. Filing late
Remember the filing date! It is important to file your tax return on time so that you avoid any penalties and interest HMRC impose for late filing. If you are trying to file the return at the last minute (like everyone else!), the HMRC portal suffers from slowdown, so filling out the return can take longer than you think.
5. Paying amounts due late
Filing your tax return does not mean that your obligations are over. If there is a tax liability to pay, make sure it is paid on time. If there are instalments to pay you should make sure that those payment dates are noted down somewhere so that you do not forget about it in the near future.