More than 12 million individuals in the UK submit a Self Assessment tax return. While the majority comply with the requirements, approximately 1.8 million fail to meet the online filing deadline, leading to penalties for late submissions. As the deadline for registering for Self Assessment approaches, without good planning, you might be more susceptible to errors on your Self-Assessment Tax Return, particularly if you are filing for the first time. Do not worry; we are here to help you. This blog will pinpoint common Self Assessment tax return mistakes you can avoid during tax filing.
What are the most common Self Assessment tax return mistakes?
Completing your Self Assessment shouldn’t be stressful. However, if you are doing it for the first time, it can seem overwhelming. Fortunately, being aware of the following common errors can be helpful.
1. No Government Gateway user ID
One of the most common Self-Assessment tax return mistakes is forgetting or entering an incorrect Government Gateway ID which is a 12-digit number. Both issues can prevent you from filing tax returns, and you might end up paying a penalty if you try to file it close to the deadline, which is 31 January.
The Government Gateway provides access to an account which enables you to register for online services provided by the Government such as completing your self assessment or paying VAT. Don’t wait until the last minute – if you haven’t done so already, register for a Government Gateway user ID well before the filing deadline (January 31st for online submissions).
2. Incorrect UTR or NI Number
Entering the incorrect UTR (Unique Taxpayer Reference) or NI (National Insurance) number is one of the most prevalent Self-Assessment tax return mistakes. People also forget to include them in their tax returns. While registering for Self Assessment, HMRC will give you a 10-digit UTR number to identify you and process your tax return. This number is different from the Government Gateway user ID.
HMRC will not recognise your identity if you put in an incorrect UTR number. So always double-check these numbers carefully before submitting your SATR. However, if you cannot find your UTR, you can retrieve it online or by calling the HMRC helpline.
3. Missing supplementary pages
In some cases, HMRC requires additional information to evaluate your tax circumstances, typically related to income that cannot be adequately clarified within the primary Self Assessment tax return. These pages provide detailed information regarding particular income sources, expenditures, or calculations related to Capital Gains Tax (CGT).
Overlooking these pages is quite common, resulting in your return being either rejected or inaccurately processed. Hence, we recommend you review the HMRC guidance to confirm that you have included all necessary supplementary pages.
4. Failing to declare all income
One of the most severe Self Assessment tax return mistakes people make is failing to declare all their taxable income. This includes income from various sources such as rental properties, foreign income, savings interest, dividends, self-employment, investment returns, capital gains, pensions, and freelancing. Recent increases in savings account interest rates makes this a potential element to watch.
Failing to include income sources in your Self Assessment may be regarded by HMRC as deliberate tax evasion, potentially resulting in significant penalties and other legal repercussions.
Therefore, to prevent errors in your Self Assessment, it is essential to maintain a complete record of all income sources and ensure that all information is accurately reported when submitting your tax return.
5. Missing the deadline
HMRC statistics indicate that over 11.7 million taxpayers submitted their tax returns before the 31 January 2023 deadline. Nevertheless, 600,000 taxpayers failed to meet this deadline. Missing the tax deadline is one of the most frequent errors taxpayers make in Self Assessment.
Hence, we advise you not to leave your tax return until the last minute. Give yourself ample time to compile your records and submit your return before the deadline. Failure to file on time may result in HMRC imposing a penalty ranging from £100 to 100% of the tax owed for Self Assessment, contingent on the specific circumstances. Many people fail to realise that they can file their previous year’s tax return on the 6th of April and needlessly leave it until the eve of the 31st of January.
6. Forgetting tax-free allowances
If your income surpasses the personal income allowance of £12,570, only the amount exceeding the tax-free threshold will be liable for taxation.
For example, if your earnings total £22,570, you would only be taxed on the £10,000 that exceeds the tax-free allowance. In addition to the personal income allowance, other tax-free allowances require proactive application.
Additional allowances include the marriage allowance, blind person’s allowance, maternity allowances, and childcare benefits, which you can claim if you are eligible. It is crucial to claim these tax-free allowances correctly; otherwise, HMRC may tax your entire income, resulting in a significantly higher tax liability than usual.
7. Not keeping complete records
Keep your financial records accurately and up-to-date before filing tax returns makes this task a lot easier. This minimises the chance of mistakes and delays and streamlines the filing process. Keep detailed records of all your income from different sources, allowable expenses, business purchase receipts, invoices, bank statements, and relevant tax-related documents with you.
Proper record-keeping is essential for a smooth Self-Assessment tax return experience. These documents can serve as crucial proof if HMRC seeks to verify your tax return information.
8. Not declaring the correct salary and benefits
If you’re employed, your employer should provide you with a P60 form detailing your salary and a P11d form detailing any benefits received in the tax year. Carefully check the information on both and ensure it’s accurately reflected in your Self-Assessment tax return.
Don’t forget to declare any taxable benefits you receive, such as company car usage or private health insurance. Inaccuracies can lead to under or overpaying tax, potentially incurring penalties or delays in obtaining a tax refund.
Correct your Self Assessment tax return mistakes with 3E’S
Self Assessment tax returns can be daunting and overwhelming if you do not plan. However, avoiding common Self Assessment tax return mistakes can significantly reduce stress and ensure a seamless filing process.
Conducting thorough research ahead of time is essential, as incomplete submissions, delayed payments, and inaccurate information can extend the process and lead to penalties. If you are uncertain about the proper way to file your tax return, it may be beneficial to seek professional guidance.
At 3E’S, we prioritise our clients’ time and financial resources by managing their Self-Assessments in a way that allows them to relax. We will thoroughly examine your income and expenses to guarantee that your tax return meets all compliance requirements. Schedule a free consultation with us now.
