Tax Return Mistakes to Avoid: Expert Tips for UK Taxpayers
1. Missing the Deadline
One of the most frequent mistakes taxpayers make is failing to submit their tax return on time. The deadline for online filing with HMRC is 31st January each year, while paper returns are due by 31st October of the previous year.
Expert Tip:
Set calendar reminders well in advance of the deadline. Submitting your return early not only avoids penalties but also gives you time to resolve any issues.
2. Providing Inaccurate Information
Errors in personal details, such as your National Insurance number or address, can cause complications in processing your tax return. Additionally, incorrect financial figures might raise red flags.
Expert Tip:
Double-check all personal and financial information before submitting. Keep accurate records of income, expenses, and investments throughout the year to make this process easier.
3. Failing to Declare All Income
Forgetting to include income from side jobs, freelance work, rental properties, or overseas investments is a common error. HMRC has access to third-party data and can cross-check your return against it.
Expert Tip:
Use a reliable system to track all your income sources. If in doubt, consult a tax professional to ensure nothing is overlooked.
4. Overlooking Eligible Deductions and Allowances
Many taxpayers miss out on potential tax savings by not claiming allowable expenses, such as business costs, charitable donations, or home office expenses for self-employed individuals.
Expert Tip:
Familiarize yourself with the latest tax reliefs and allowances. Keeping receipts and proper documentation can make it easier to claim deductions accurately.
5. Not Using the Correct Tax Code
An incorrect tax code can result in overpaying or underpaying tax. This issue is particularly common for individuals with multiple income sources or recent job changes.
Expert Tip:
Check your tax code on your payslip or HMRC letter. If it seems incorrect, contact HMRC immediately for clarification.
6. Ignoring Self-Assessment Payments on Account
If your tax bill exceeds £1,000, you may need to make payments on account for the next year. Missing this requirement can lead to interest charges or late payment penalties.
Expert Tip:
Plan your finances to account for payments on account. Use HMRC's payment plan options if you're struggling to meet deadlines.
7. Failing to Save Supporting Documents
HMRC requires you to keep records for at least five years after the 31st January filing deadline. Failing to do so could lead to complications if you're audited.
Expert Tip:
Digitize your records and use cloud storage to ensure documents are accessible and secure.
8. Neglecting Professional Advice
Tax laws and regulations are complex and subject to change. Attempting to handle your tax return without professional guidance may result in errors or missed opportunities for savings.
Expert Tip:
Hire a qualified accountant or tax advisor, especially if your financial situation is complex. Their expertise can help you optimize your tax return and avoid pitfalls.
9. Failing to Check Before Submission
Rushing to file your return without reviewing it thoroughly is a recipe for mistakes. Even small errors can cause delays or penalties.
Expert Tip:
Use HMRC's online self-assessment tool, which highlights potential errors before submission. Alternatively, have a trusted advisor review your return.
Final Thoughts
Tax filing doesn't have to be stressful. By staying organized, informed, and proactive, you can avoid common mistakes and ensure your tax return is accurate and timely. Remember, the key to a hassle-free tax season is preparation—and when in doubt, consult a professional.
Filing correctly the first time not only saves you money but also peace of mind. So, get started early and make the process as smooth as possible!