Tax season can be overwhelming, especially when it comes to handling self-assessment tax returns. Tax return errors can lead to unnecessary work and heavy penalties. Precise submissions are necessary to ensure a smooth financial transaction and avoid errors.

In this blog Experlu shared the most typical mistakes made while submitting self-assessment tax return. By understanding these mistakes, you can guarantee a quicker, more accurate filing procedure and maintain tax compliance.

Table of contents 

Common Mistakes to Avoid in Self Assessment Tax Returns

• Mistakes to Avoid in Self Assessment Tax Returns

Mistakes to Avoid in Self Assessment Tax Returns

Incorrectly Claiming Deductions

Ensuring that you take the appropriate deductions to lower your tax liability is crucial, but so is making sure that you do it accurately and in compliance with tax laws. Certain taxpayers could overstate their claimed expenses or seek deductions to which they are not entitled. 

Deduction applications are nevertheless closely examined by HMRC, and false claims may result in fines and investigations. Even if it’s inadvertent, it’s crucial to familiarise yourself with the regulations around permitted deductions to make sure you’re not making incorrect claims.

Failing to meet the deadline 

Errors are more likely to occur when everything is left until the last minute. To lessen the chance of filing an inaccurate return, prepare ahead of time and take your time completing the form.

Start by gathering all relevant documents and information, including your P60 form (if you are employed), bills, bank statements, rental agreements, student loan statements, invoices and receipts, information on any benefits you have received, and any other relevant data specific to your circumstances.

If you fail to file your online return and pay the required taxes, you may face significant penalties.

Missing/incorrect UTR or NI number

Using the incorrect National Insurance (NI) or Unique Taxpayer Reference (UTR) number is one of the most frequent errors made when filing taxes. 

When you apply for Self-assessment or form a limited business, HMRC issues a UTR (Corporation Tax UTR). HMRC will not be able to identify you when you file your tax return if you do not provide this 10-digit number. 

Ignoring Allowable Expenses

Taxpayers, particularly self-employed individuals, may frequently ignore allowable expenses that can lower their tax liability. HMRC permits deductions for some business or employment expenses, such as office equipment, travel costs, and professional fees.

Self-employed individuals could overlook these costs since they consider them personal and so lower their tax obligation. To properly reduce your taxable income, make sure you claim all allowable expenses. You should also maintain thorough documents and receipts to back up your claim.

Inaccurate or Incomplete Information on Tax Returns

When it comes to filing taxes, precision is your greatest ally. Incomplete or inaccurate tax return information can result in audits, penalties, and unnecessary stress in addition to the possibility of urgent repairs and delays.

From basic errors in personal information to missing income sources or improperly computed deductions, inaccuracies can have serious consequences. Even meticulously crafted financial plans can become unstable due to the cascading impact of these errors.

Do-It-Yourself (DIY) Tax Filing When Professional Help Is Needed

Although filing taxes yourself could seem like a simpler and more affordable option, it’s not always the ideal choice, particularly for people in complicated financial situations.

Entrepreneurs, real estate investors, and high-net-worth individuals may have to deal with complex tax situations that are beyond the knowledge of the average person and need careful planning and comprehensive expertise. You may maximise your tax efficiency and avoid expensive blunders by knowing when to seek professional assistance from an online accounting firm.

Here are some instances where you might want to seek professional help;

• Complex Financial Portfolios: You might want to speak with a tax expert if you have rental properties, investments, or overseas income as sources of income. 
• Major Life Events: Events like retiring, beginning a business, getting married or divorced have a big impact on your tax preparation and status.
• Recent Legislation Changes: Professional accountants and auditors advice can guarantee compliance and optimization if there have been recent changes to tax legislation, particularly if they have an impact on your finances.
• Peace of Mind: Probably the best argument for getting professional help from an accountancy firms is the knowledge that your tax matters are in experienced hands, freeing you up to concentrate on other facets of your life or business.

Final thoughts 

Filing a self-assessment tax return doesn’t have to be a headache. By planning, keeping detailed records, and avoiding these common mistakes, you can ensure your return is accurate and submitted on time. Remember, staying organised throughout the year is key to a smooth and stress-free tax season.