Mistake #1: The simple things
These may sound obvious, but it's often the simplest details that trip people up. You might have calculated every last penny of every last expense. You might have kept and organised all your bank statements and payslips. However, all that care and effort mean nothing if you forget to sign and date your paper tax return, or haven’t returned the Authorising your agent (64-8) form to let your accountant act as your agent. Remember to check such things as whether you have to use the original form or if a scan or photocopy is ok, or whether the taxman needs a physical signature.
RIFT tip: Filing online might be a smart move to avoid easy mistakes like this. Getting us to sort out your tax return for you might be a better one.
Mistake #2: Skimping on details
What HMRC want from your tax return is a complete overview. They won't be satisfied with anything less. Skipping over things you aren't sure of, or writing "details to follow" will only land you in hot water. Always use cold, hard numbers when they're asked for.
RIFT tip: Remember you can save your progress on the returns website. If you're waiting for exact figures or details, you can always come back and fill them in later. Just remember to get it all finalised before the deadline.
Mistake #3: Getting your sums wrong
Another obvious one. If HMRC asks for a figure, it means it wants the EXACT figure. Don't guess or estimate. Get it right and double-check it.
RIFT tip: The website forms will do quite a lot of the actual calculations for you. Again, though - if you're even slightly concerned about your accuracy then professional advice is the way to go.
Mistake #4: Missing a deadline
This is a big one. Paper tax returns have to be filed by the 31st of October. If you're doing it online, you've got until the 31st of January. The fines for missing a tax return deadline start at £100 for being even a single day late. After that, things just get worse.
RIFT tip: Once more, filing via the website gives you a little extra breathing space. Remember to check your account details on the HMRC site regularly. You'll see at a glance what deadlines might be looming.
Mistake #5: Fiddly details
This is a broad category, and there are a lot of tiny details that can catch you out. Make sure your National Insurance number and Unique Taxpayer Reference (UTR) number are correct.
RIFT tip: If you lose track of your UTR, you can find it on any correspondence you get from the taxman. Even if you can't remember it, he will.
Mistake #6: Messy expenses calculations
Claiming your expenses correctly is a huge part of getting your tax return right. There are strict and complicated rules about what counts as a business expense. Don't cut corners learning them. The taxman has no sense of humour when people claim for things that aren't allowed.
RIFT tip: This mistake can cut both ways. A lot of people miss out on expense claims they could make, and end up paying way too much tax. A quick chat with RIFT could go a long way toward putting cash back in your pocket.
Mistake #7: Not telling the whole story
It can take a lot of work to fill in all the blanks when your finances are complicated - but it's worth it. Remember that this information can actually save you money or qualify you for tax relief. Depending on your situation, you might have to give details of things like:
- Life insurance gains.
- Stock dividends.
- Income from property.
- Any benefits you're claiming.
- Income from savings and pensions.
RIFT tip: The self assessment tax return form has a space for "additional information". Remember to use it if you need to add details not covered by the rest of the form.
Mistake #8: Not doing your homework
Filing a self assessment tax return means paperwork. From the money you've got coming in to the miles you're travelling, you need to get used to keeping good business records.
The taxman isn't interested in seeing a rough outline of your finances. He wants the full picture. If you're claiming expenses, you need receipts. If you're billing clients, you need invoices. Depending on the business you're in, there could be a range of details to keep track of. You've got to be able to prove everything you say in your return.
RIFT tip: If you're working PAYE and filing a tax return, you need to keep your records for at least 22 months after the end of the tax year. If you're self-employed, you need to hang onto them for 5 years!