Tax Return to Complete? 5 Costly Self-assessment Mistakes to Avoid

Self-assessment Mistakes to Avoid

Leaving your tax return until the last minute could be a costly mistake. If you miss the deadline, you will be charged with penalties. And if you rush and make a mistake, it could lead to incorrect submissions and tax payments. Read our  Self-assessment tax advice to help with putting together your Self-assessment tax return.

Using the Wrong Tax Code

Many taxpayers could be paying too much or too little tax by using the wrong tax code. Check that the tax code on your tax return is the same as that on your payslip. People who have corrected a tax code after many years have been refunded.

To Claim or Not to Claim

It is not easy knowing what is and isn’t allowed to be claimed. Of course you want to make sure that you are using all available allowances, but beware penalties for incorrect claims. When in doubt, speak to your accountant to help you identify what can be claimed. 

Related Post: How to Appeal an HMRC Self-assessment Penalty

Not Including Interest on Income

When doing your Self-assessment tax return have all documents relating to your savings and investments ready, and accurately state any interest earned: interest earned from loans, online peer-to-peer lending, credit unions, friendly society accounts and dividends from UK companies. Interest from ISAs don’t need to be declared.

Incorrect Pension Contributions

Payments into a pension need to be accurately entered on your tax return: too little and you miss out on tax relief, too much and HMRC could charge you. If your employer deducts pension contributions from your salary, you won’t need to enter these on your tax return.

Missing the Deadline

The best Self-assessment tax advice is to file your tax return correctly and on time. Leaving your self-assessment until the last minute can lead to errors and missed deadlines. Penalty fines can range from £100 to 100% of your tax bill.

Related Post: A Guide to Filling in and Filing Your Self-assessment Tax Return

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