Clearview National January 2020 - Issue 218 | Page 94
BUSINESSNEWS
Common Self Assessment
Mistakes and How to Avoid Them
Tax Preparation Specialist Provides Guidance for Problem-Free Tax Returns
» WITH UNDER TWO MONTHS UNTIL
the Self Assessment deadline, those expected
to complete and submit a tax return could
be forgiven for feeling anxious about the
process. Facing penalties for failing to submit
on time and additional interest if income is
undeclared, taxpayers facing Self Assessment
will be heading into the festive period facing
the extra burden of ensuring their tax return
is correct. Tax preparation specialist David
Redfern, Managing Director of DSR Tax
Claims Ltd, is at hand to explain the common
mistakes taxpayers make when completing a
tax return and how they can be avoided.
Basics first, it is essential that anyone who
needs to complete a tax return for income
received during the 2018/19 tax year is
registered for Self Assessment with HMRC.
Redfern explains: “Before you can submit a
tax return, you have to register with HMRC
and receive your Unique Taxpayer Reference
(UTR). Additionally if you want to file your
tax return online, and the deadline for a
paper return has now passed, you’ll need to
register for online Self Assessment and receive
your activation code for your online account.
HMRC sends these pieces of information by
post and they take around 10 working days,
longer at times, so time is of the essence if you
haven’t done this yet. HMRC accepts that
there will be circumstances where a taxpayer
cannot file their tax return on time but
avoidable errors caused by disorganisation or
just not realising this needed to be done won’t
be accepted as a reasonable excuse.” Taxpayers
can register for Self Assessment and set up
their online account through the Government
Gateway website.
Once registered, incomplete or inaccurate
information is often the downfall for many
taxpayers. Taxpayers must ensure that they
have recorded all forms of income received
so that their tax bill is calculated correctly.
Redfern stated: “Most taxpayers when
thinking of income will either focus on their
self-employment income or the income they
received from an employer, forgetting other
forms of income like rental income, capital
gains, share dividends, savings interest and
94 » JAN 2020 » CL EARVI E W- UK . C O M
foreign income. Often overlooked are taxable
benefits, such as statutory maternity pay,
statutory sick pay and Jobseekers Allowance.
If you received any taxable benefits during
the 2018/19 tax year, they also have to be
included in your income.” Where possible,
all figures in a Self Assessment tax return
should be actual not estimated figures. Any
estimates used should be clearly marked as
such and amended for actual figures as soon as
available.
Another common mistake when completing
a tax return is omitting key expenses or
failing to claim all available tax relief. Redfern
explains: “Sole traders and small business
partnerships need to make sure that they are
claiming the tax relief on all their allowable
expenses through their tax return, whether
relating to essential equipment for the running
of their business, mileage expenses or the
costs involved in using one’s home as an office
or workshop. But not all Self Assessment
taxpayers are self-employed - they could be
a high rate taxpayer or claiming more than
£2,500 in expenses. In these instances they
won’t be entitled to claim as wide a range
of allowable expenses as someone who is
self-employed but they shouldn’t forget key
areas such as charitable donations.” Taxpayers
should ensure that they retain good, accurate
records of their outgoings and expenses in
order to satisfy HMRC’s requirements.
Failing to meet the deadlines is a common
mistake, with nearly three quarters of a
million taxpayers facing a penalty after the
2017/18 deadline. Redfern states: “Not only
does the Self Assessment tax return need to be
submitted by midnight on 31st January 2020,
you also need to make sure that you have
settled your tax bill by that deadline as well
as made the first payment on account for the
current tax year, if this applies to you. With a
penalty of £100 for missing the deadline by
just a day and interest mounting up on unpaid
tax, it could be a costly mistake.”
Finally, Redfern advises those submitting a
tax return to keep an eye out for small mistakes
which can have large costs. He explains: “Each
year, some taxpayers make silly little mistakes
like forgetting to actually submit their tax
return, even though they’ve completed it, or
getting their UTR and National Insurance
numbers incorrect and these can all have much
bigger consequences, such as penalties and fines
for unpaid taxes. Just taking five to ten minutes
once you have completed it to make sure that
your personal details are correct, that you
haven’t mistyped any of the income or expenses
figures, is invaluable - as is making sure that
you have actually submitted it and that you
have an acknowledgement to show that to be
the case.”
www.dsrtaxclaims.co.uk