Five Common Filing Mistakes That Could Land You in HMRC’s Crosshairs and How to Avoid Them

Filing your tax return accurately is essential to avoid unnecessary trouble with HMRC. Many people make simple mistakes that could trigger investigations or penalties. Understanding the most common errors you might make can help you keep your tax affairs in good order and reduce the risk of costly fines.

Missing deadlines, incorrect income reporting, and simple typos are among the top mistakes that put your tax return in HMRC’s spotlight. You need to be aware of these pitfalls and how to avoid them to ensure your tax return is filed correctly and on time.

Keeping your tax affairs clear and error-free will save you stress and potential financial setbacks. Knowing what to watch out for is key to staying compliant and managing your tax responsibilities confidently. For more detail on common mistakes, see this guide to the most frequent errors on self-assessment tax returns.

Overlooking Essential Information on Your Tax Return

Missing key details on your self-assessment tax return can cause errors that delay processing or trigger HMRC inquiries. You need to provide accurate personal information, declare every income source, and include all necessary supplementary pages to avoid problems.

Incomplete Personal Details

Your tax return must include correct personal details to match HMRC records. This means filling in your full name, address, Unique Taxpayer Reference (UTR) number, and National Insurance (NI) number without mistakes.

If your UTR or NI number is wrong or missing, HMRC may not connect your return to your account, causing delays. Check your details carefully before submitting your self-assessment, as errors here can complicate processing.

Always double-check your contact information to ensure HMRC can reach you if needed, especially if you’ve recently moved or changed your phone number or email.

Missing Sources of Income

You must report all taxable income on your self-assessment tax return. This includes:

• Rental income from properties or short-term lets like Airbnb
• Dividends and other investment income, including from ISAs if taxed
• Foreign income from overseas jobs or investments
• Any untaxed income such as freelance or casual work

Failing to declare any income sources can lead to penalties or tax investigations. Keep a clear record of all earnings, even small amounts, and use HMRC’s guidance if you are unsure which income to include.

Forgetting Supplementary Pages

Supplementary pages detail specific types of income and expenses, like business profits, capital gains, or rental income. Forgetting to include these pages means you won’t report all your obligations fully.

For example, if you have rental income, you must complete the property supplementary page. Similarly, if you made capital gains during the tax year, you need the capital gains page.

Including supplementary pages is essential for claiming allowable expenses such as professional fees or business expenses. Omitting them could result in incorrect tax calculations and potential enquiries from HMRC.

Common Calculation and Reporting Errors

Mistakes in calculation and reporting can cause your tax return to be wrong. Errors like miscalculating taxable profits, claiming the wrong expenses, misreporting savings income, or mishandling Gift Aid and Marriage Allowance can increase your tax bill or trigger HMRC to investigate.

Miscalculating Taxable Profit and Liabilities

Getting your taxable profit wrong is a common issue. This usually happens if you mix up business income and expenses or forget to include certain earnings. You must subtract allowable expenses correctly to find your profit.

Errors here affect your income tax and National Insurance due. You also need to calculate your tax liability using the correct tax bands and personal allowance amounts. Using outdated rates or ignoring pension contributions can cause errors.

Double-check all figures, and consider using tax software or an accountant if you’re unsure. Mistakes in taxable profit calculations can lead to penalties or delayed refunds.

Incorrectly Claiming Allowable Expenses

You can reduce your tax bill by claiming allowable expenses, but only if you claim the right ones. Common mistakes include claiming personal costs, such as household bills, or expenses not related to your business, like non-work travel.

Typical allowable expenses include business travel, office supplies, and phone costs. You should keep clear records and only claim what HMRC accepts. Claiming too much or unapproved expenses can cause HMRC to ask for repayments.

Be careful to separate mixed-use costs, such as partially work-related phone bills, and only claim the business proportion. Accurate expense claims reduce your taxable profit without increasing the risk of an audit.

Misreporting Savings and Investment Income

You must report savings and investment income accurately. This includes interest from bank accounts, dividends, and ISA income. Many taxpayers forget to include some income or miscalculate tax due on dividends.

Dividends have a tax-free allowance but higher rates apply beyond that. ISA income is tax-free and should not be included in taxable income. Mixing these up can lead to errors in reported income and tax calculations.

Check your bank and investment statements carefully. Report all relevant income and use the correct tax rates for each type to avoid misreporting, which could lead to penalties or inquiries from HMRC.

Errors With Gift Aid and Marriage Allowance

Gift Aid allows charities to claim tax relief on your donations, but errors often occur in reporting the donations or understanding the tax impact. You must declare Gift Aid donations correctly to get the right tax relief.

Marriage Allowance lets you transfer part of your personal allowance to your spouse if they earn more, but it has strict eligibility rules. Incorrect claims can result in overpaid or underpaid tax.

You should keep donation receipts and make sure you meet the criteria for Marriage Allowance. Updating HMRC with changes in circumstances, like your income or marital status, helps avoid mistakes in these reliefs.

Missed Deadlines and Failure to Meet HMRC Requirements

Failing to meet HMRC deadlines or filing requirements can quickly lead to penalties and complications. Staying on top of your tax return deadline, payments on account, and keeping proper records is essential to avoid unnecessary fees and suspicion.

Late Filing and Payment Issues

If you miss the online filing deadline or fail to pay your tax bill on time, you face automatic penalties. HMRC charges an initial £100 penalty once you pass the deadline. After 3 months late, daily penalties can start, and after 6 months, further fixed penalties apply.

Paying late also triggers interest charges on what you owe, which adds up daily. If you delay more than 12 months, penalties rise sharply, often reaching 5% of your tax bill or more. These charges apply whether the delay was accidental or deliberate.

HMRC treats persistent late filing and payment as a sign of non-compliance or even tax evasion. It’s important to submit your tax return on time and pay your tax liabilities by the deadline to avoid penalties and the increased scrutiny that follows.

Neglecting to Keep Comprehensive Financial Records

You must keep clear, accurate financial records to support your tax return details. Poor or incomplete record-keeping can lead to underreporting income or overstating expenses, which increases the risk of penalties for careless or deliberate mistakes.

HMRC expects you to keep records for at least 5 years after the 31 January tax return deadline. This includes invoices, receipts, bank statements, and PAYE documents if applicable.

If HMRC requests evidence and your records are incomplete or missing, you may face fines and be accused of failing to take reasonable care. Using a tax expert or qualified accountant can help ensure your records meet HMRC standards.

Using Incorrect or Outdated Tax Software

Your choice of tax software affects how you meet HMRC requirements. Using software that is not updated to reflect the current tax rules can cause errors in your return and miscalculation of payments due.

HMRC automatically accepts returns filed through approved software. If your software lacks validation checks or is outdated, you risk submitting inaccurate returns. This may trigger penalties or queries for deliberate mistakes or underreporting.

Always use HMRC-compliant software and ensure it is up to date, especially during tax season when rules and rates may change. Many software providers offer online filing portals that streamline the process and reduce error risks.

Seeking Professional Assistance to Avoid Mistakes

Knowing when to get help and what benefits experts offer can keep you safe from errors on your self-assessment tax returns. Professional advice ensures your tax return is accurate, you claim all possible tax reliefs, and deadlines are met correctly.

When to Hire an Accountant

You should consider hiring a qualified accountant if your tax situation is complex. For example, if you are self-employed or have multiple income sources, an accountant can manage your tax return more efficiently.

If you struggle to understand allowable expenses or worry about errors, a professional can reduce the chance of mistakes. Accountants also keep up to date with changing tax rules, so your filing stays compliant.

You might also need an accountant if HMRC has questioned your previous returns or you face a tax investigation. They can represent you and communicate on your behalf to resolve issues quickly.

Benefits of Consulting a Tax Adviser

A tax adviser specialises in identifying all legal tax reliefs and allowances you qualify for. This helps lower your tax bill without risking penalties. They understand how to correctly report income and expenses, which avoids common filing errors.

Consulting a tax expert saves you time and reduces stress during the self-assessment process. They prepare your tax return with care and keep records organised. If you miss a deadline or make a mistake, they provide support to correct it promptly.

Tax advisers offer a clear view of your financial situation, giving tailored advice based on your circumstances. This is especially valuable if your income or employment status changes frequently.

Using professional help is an investment that can keep you compliant and avoid costly errors on your tax return.  

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