Common tax return mistakes to avoid
Just one slip up can end up costing you when it comes to filing your tax return. This could mean that you miss out on a refund, end up paying more tax than required, or that HMRC is breathing down your neck and demands an audit. To prevent this from happening, read on to discover the common mistakes to avoid.
Missing supplementary pages
If your main tax return does not include additional income, you will need to provide supplementary pages to HMRC so they can see additional information on life insurance gains, share scheme income, employment deductions, income from property, and stock dividends.
Not declaring all income
You need to make sure you declare all types of income. Otherwise, you could face a severe penalty from HMRC. You may even face prosecution if HMRC deems you have done this deliberately.
Examples of the income you need to include are as follows:
• Employee share schemes
• Capital gains
• Foreign income, including evidence of tax that has already been paid overseas
• Property income
• Interest, dividends from trusts, building societies investments, bank accounts, savings, etc.
• Pension income
• Benefits, including job seekers allowance, statutory sick pay, and paternity/maternity leave
• Income from employment
This is one of the most frequent errors made on tax returns. Make sure you double-check all of your calculations before you submit your tax return.
Trying to claim expenses that are not valid
There are clear rules in place regarding what can and cannot be deducted as an expense. Make sure that any of the expenses you are going to deduct are valid. You should consult with an accountant if you are uncertain.
Poor record keeping
Last but not least, poor record keeping could come back to haunt you, especially if HMRC want to audit your activity. You need everything handy and track properly, from your employee share schemes and expense records to student loan payments, capital gains, and bank statements.
If you'd like to talk to our tax expert about your specific situation please get in touch with our Tax Partner Robin Stevenson using his contact details below:
Robin Stevenson - Tax Partner
Tel: 01825 763 366
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If you run your own SME, then chances are bookkeeping is not one of your favourite jobs! For many small business owners it is a necessary evil that takes up lots of valuable time. Of course, it is vital to do in order to keep you compliant with the law and make your annual tax returns easier to manage.
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