Common tax return mistakes to avoid

Unfortunately, many tax payers hold off completing their tax return until close to the tax return deadline. This leads to a rush to complete the tax return and can result in common tax return errors. Errors in self-assessment tax returns can lead to penalties which, depending on the type of errors, whether it was intentional or concealed can be huge. 

We offer some tips and advice to help you avoid tax return mistakes and errors this tax season. 

Not realising you need to file a tax return 

Understanding when you need to register for self assessment and file a tax return is important in ensuring you keep on top of your tax obligations. Filing an accurate tax return can give you peace of mind that you’re paying the correct amount of tax and declaring this correctly on your tax return. 

From the 2023/24 tax year, the self-assessment threshold increased from £100,000 to £150,000 for those earning through PAYE. However, with the additional rate tax band from £125,140 resulting in a zero Personal Savings Allowance, these taxpayers may have a tax bill on any interest income they have. 

 

Missing something off your tax return 

When it comes to completing a self assessment tax return, you need to ensure that you disclose everything to HM Revenue & Customs (HMRC). If you’re preparing a tax return because you rented out your home, in order to complete your tax calculation, you’ll need to include all details of any other taxable income you received. This includes: 

• Bank interest – excluding ISAs which are tax-free 
• Child benefit received – in case the High Income Child Benefit Charge applies 
• Freelance work – if you earned £100 doing some side hustle work this should still be included on your tax return 
• Student loan deductions 
• Dividends and income from investments 
• Cryptoasset disposals 
• Selling an asset 
• State pension income 

Being aware that HMRC receives information from platforms, such as AirBnB, and your bank etc is essential in understanding that HMRC will know if you omit information on your tax return. 

Our guide to what your accountant needs to file your tax return will offer you a guide to what you should include and think about. 

Claiming the property allowance and trading allowance 

The property allowance and trading allowance were introduced in 2017 for the 2017/18 tax year onwards. You can use the allowance of £1,000 each against property and/or trading income instead of expenses. 

For example, if you earn £1,400 on a freelance basis of self-employed income you can claim the trading allowance of £1,000 instead of adding up all allowable expenses to reduce your taxable income to £400. 

Missing the tax return deadline 

An estimated over 1 million people filing their tax return late for 2022/23, resulting in immediate automatic late filing penalties of £100 each. Further penalties and late payment interest will also accrue if you don't file your tax return and paid your taxes. 

Claiming all tax reliefs 

Claiming all relevant tax reliefs will save you money. Tax relief include: 

• Pension contributions 
• Charitable donations 
• Blind person’s allowance 
• Marriage allowance 
• Allowable expenses 

Knowing what you’re entitled to is essential in getting your tax return correct and saving you money. Speaking to an accountant will ensure you’re not missing out. 

How to avoid common tax return errors 

1. Use an accountant 

Accountants work in tax day in and day out, making them experts in tax legislation and tax reliefs. They will provide you with a professional service to support you in getting your tax return completed on time. When you speak to an accountant they’ll be able to provide you with an upfront quote for the services you require. 

2. Prepare your tax return sooner 

If you can prepare your tax return sooner, you'll give yourself more time to compile your records and you won’t be rushing to get it finished. Rushing your return can lead to omissions and mistakes so we recommend you start early and give yourself plenty of time. There are other benefits to filing your tax return early which can be found in our guide. 

3. Double check all details 

This will come down to how much time you have, but taking a step back and going through all the details included on your tax return and tax calculation is essential for picking up any mistakes. You could also ask a relative or friend to look at your tax return to spot any errors. 

4. Use software 

Advances in software can help you manage your tax and accounts records more efficiently. Speak to your accountant who can offer advice about software on the market and which would be best suited to your needs. 

How TaxAssist Accountants can help 

At TaxAssist Accountants Hendon Central we are experts in tax and can help you in ensuring your tax return is complete and correct. If you need more support call our team on 0203 988 0580 or use our online contact form and we’ll call you back. 

First published 9 Jan 2025

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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