An independent survey of UK taxpayers revealed almost a third of those who file their own self-assessment tax return don’t fully understand what they can and can’t claim for.
Consumer group Which? quizzed around 1,300 entrepreneurs in a bid to understand their self-assessment tax return experiences.
Each taxpayer was shown a list of potential items, with 31% of respondents admitting being unsure which items could be claimed for as qualifying expenses in their tax return.
Those who file their self-assessment tax returns online and do not include annual expenses relating to their income risk paying more tax to HM Revenue and Customs (HMRC) than is necessary.
Interestingly, 93% of survey respondents who had made expenses claims on previous tax returns said they had never been asked by HMRC for more information to back up their claims. Nevertheless, those who are caught, including ineligible tax reliefs in their tax returns, incur potential fines from HMRC.
The severity of these penalties is based on the amount of tax owed and whether the tax authority believes the taxpayer has deliberately sought to claim for ineligible tax relief.
HMRC has the authority to request details on income and expenses dating back several years, so it’s important that your tax affairs are up straight and above board to avoid any nasty surprises.
“Few people enjoy the annual ordeal of submitting a tax return, but getting to grips with the rules will help you to avoid paying too much, or being hit with a hefty fine,” said Jenny Ross, editor, Which? Money.
It’s up to you to organise your tax affairs
It’s important to remember that HMRC is not duty bound to advise you on how to organise your financial affairs and minimise the amount of tax due.
We’re here to help you focus on doing what you do best – running your business – rather than stress about the 31st January self-assessment tax return deadline.Our self-assessment tax returns service can minimise the risk of an HMRC enquiry into your personal or business tax affairs, all for a fixed, competitive price.
To arrange a free initial consultation on your self-assessment position, call our friendly and experienced team today on 0203 325 9825 or drop us a line using our online enquiry form to get the ball rolling.
Last updated: 13th January 2021