{"id":10633,"date":"2023-09-23T12:11:44","date_gmt":"2023-09-23T11:11:44","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=10633"},"modified":"2024-04-13T09:17:41","modified_gmt":"2024-04-13T08:17:41","slug":"self-assessment-tax-return-mistakes","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/self-assessment-tax-return-mistakes\/","title":{"rendered":"6 common Self Assessment tax return mistakes and how to avoid them"},"content":{"rendered":"
\n Last updated: 13 Apr 2024<\/strong>\n <\/div>\n \n

A Self Assessment tax return is HMRC’s system for self-employed individuals to declare how much tax they owe based on their earnings. Whether or not you\u2019re new to tax, the process can be overwhelming if your finances are complex, and many people have trouble completing it correctly.<\/p>\n

According to the latest statistics from HMRC, an estimated 1.1 million Self Assessment customers missed the deadline<\/a> of 31 January 2024 for filing their 2022\/23 tax returns.\u00a0So, if you\u2019ve made a mistake before, missed a deadline, or are feeling anxious about completing your first tax return, you\u2019re not alone.<\/p>\n

This guide explores the top six most common (and costly) Self Assessment tax return mistakes and what you can do to avoid them in the future.<\/p>\n

1. Missing\/incorrect UTR or NI number<\/h3>\n

One of the most common tax return mistakes is entering the wrong Unique Taxpayer Reference (UTR) or National Insurance (NI) number. In some cases, these are not included at all.<\/p>\n

A UTR is issued by HMRC when you register for Self Assessment or set up a limited company (Corporation Tax UTR). Without this 10-digit number, HMRC won\u2019t know who you are when you submit your tax return. You should use your personal UTR for your Self Assessment return, as opposed to any Corporation Tax UTRs you may have.<\/p>\n

If you\u2019ve misplaced or forgotten your UTR, you can find it in your Personal Tax Account, in the HMRC app, on previous tax returns (if applicable), or in other HMRC documents you have received.<\/p>\n

Self Assessment guidance for company directors and shareholders<\/span><\/a>\n Remember to file your Self Assessment tax return by 31 January<\/span><\/a>\n Preparing a Company Tax Return – a simple guide<\/span><\/a>\n <\/p>\n

Alternatively, you can contact the Self Assessment helpline<\/a> if you\u2019re self-employed, or request a copy<\/a> if you\u2019re a limited company owner. Your UTR should be posted to you within 10 working days, but it could be longer, so if the Self Assessment deadline is looming, be sure to give yourself plenty of time and avoid a late submission charge.<\/p>\n

Finally, your NI number ensures that your National Insurance contributions (NICs) and taxes are properly recorded under your name. If you don\u2019t know your NI number, you can find it in your Personal Tax Account, the HMRC app, or on any employment document such as a payslip or P60. If you don\u2019t have these, contact HMRC<\/a>.<\/p>\n

How to avoid<\/h4>\n

To avoid this common mistake, it\u2019s useful to have your UTR and NI numbers on hand somewhere that\u2019s memorable and easily accessible to you, especially during tax season. Sensitive information shouldn\u2019t be written down on a piece of paper. Instead, try noting these numbers down in a secure encrypted notes app.<\/p>\n

2. Over or under-claiming business expenses<\/h3>\n

Another common tax return mistake is claiming the wrong expenses or an incorrect amount. Depending on the nature of your work, there are certain running costs that you can get back in your annual tax return if they are \u201cwholly and exclusively for trade\u201d purposes.<\/p>\n

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However, some people claim expenses that they\u2019re not entitled to, or try to claim personal rather than business expenditures. There could be several reasons for this, such as genuine oversight, lack of knowledge, or an attempt to reduce tax liability. Either way, providing incorrect information in your tax return could result in a considerable penalty.<\/p>\n

There are also people who under-claim. Perhaps they\u2019re simply unaware of the expenses they are entitled to, but omitting them in a tax return could lead to an unnecessarily high tax bill.<\/p>\n

How to avoid<\/h4>\n

The best thing to do is to familiarise yourself with the list of allowable expenses<\/a>. When completing your tax return, you don\u2019t need to provide proof of expense, but you should keep a clear record of all your business receipts to ensure that you claim the correct amount.<\/p>\n

3. Failure to declare all income sources<\/h3>\n

It\u2019s vital to report all your earnings to HMRC to make sure that you\u2019re paying the correct amount of income tax. This includes:<\/p>\n