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Self Assessment error or mistake -discover the common errors

Self Assessment error or tax return mistake


First, a Self Assessment error or mistake can result in you missing the deadline. Indeed, what happens if you make a mistake on your tax return (UK)? If an error occurs, HM Revenue & Customs (HMRC) may impose a fine. When your limited company contractor Self Assessment return is wrong the first time, you will also need to do this again to correct any tax return mistakes and you may need to pay extra tax. If you do not know what to do after making a mistake there is some official HMRC errors and mistakes guidance that you can follow.

Most owners of small businesses, be they a sole trader, in a partnership, or UK contractors who are a director of a limited company, will need to complete a Self Assessment (SA) Income Tax Return each year. If you are a UK contractor, Self Assessment is one of your contractor taxes, albeit a personal tax rather than a company tax. As part of this, it is important when you complete your tax return you do not make a tax return mistake or Self Assessment error. If you do, you will need to ask an accountant for help or refer to HMRC errors and mistakes guidance.

If you are new to SA as a contractor limited company owner, or for any other reason, you may wonder what is a Self Assessment tax return. When you are required to file a tax return, you have the choice of doing this yourself, or you might consider looking for a Self Assessment tax return accountant near me to look after your tax affairs. When you complete your SA yourself, you will need to know how to fill in a Self Assessment tax return.

Initial thoughts -tax return mistake or error on tax return

As a UK taxpayer, if you are both:

  • You will have a personal tax bill in the current tax year.

Individuals are required to file a Self Assessment (SA) Tax Return every 12 months. Limited company contractors are directors of their own company therefore in most cases they will have to complete a tax return each year.

When you file your tax return, besides reporting your taxable income and paying the tax you owe, you may also be required to make payments on account in due course. If you have a good contractor accountant, they will help guide you through this process.

HMRC online personal tax account

It is a good idea to register online for a Government Gateway user ID and password. Nowadays, if you search for this, it redirects you to the HMRC official sign-in page. Therefore, when you access this page, you can create the sign-in details for their digital service and register for a personal tax account with HMRC.

With this in place, you can view your tax liabilities, payments, and any due dates for each tax year. You will also have access to view your PAYE coding notices. Therefore, you can check your latest tax code, and if there is something in here that should not be, you or your accountant can contact HMRC and ask them to correct this.

Self Assessment error or mistake -what to consider? 

When you are required to do so, an annual task is to file a UK tax return each year. The tax year covers 6 April to the following 5 April. Moreover, you must file this with HMRC by the following 31 January after the 5 April. Therefore, for the tax year ending 5 April 2022, the due date for filing of your return and payment of any tax due will be 31 January 2023.

Sad as it is, many people always leave this until the last minute. As a result, this is where Self Assessment errors can quite often occur if you do not prepare yourself. If your return is incorrect, you may also pay more tax than is due.

File and perform a check of Self Assessment tax return

The best practice is to file your tax return early each year. We advise you to check through this from start to finish once it is complete. You will then have peace of mind, knowing that you are fulfilling your duties correctly and on time.

Moreover, a tax return error can often arise if you do not check your return before filing this. There are some common reasons for such errors; we will show these below.

Unique Taxpayer Reference UTR 

You will need to show your correct UTR number on your tax return. In addition, you will also need to ensure that your National Insurance number is correct. If either of these is incorrect on your tax return, it will void this when you submit it.

As an individual, you will receive your NI number before you begin work in the UK. When you have been working, your NI number will also show on any previous payslips and tax documents you receive from HMRC.

Your UTR will show on last year’s tax return and any SA correspondence from HMRC.

Self Assessment error or mistake (UK) -imprecise records 

You must keep records of your income and any reliefs safe throughout the tax year.

To help avoid a tax return error or mistake, you should keep in a safe place the details of your:

  • Salary -this is shown on form P60 or form P45 as well as your payslips.
  • Dividends -from your own company and any others. Any company dividends from other companies should show on dividend vouchers they will send you.
  • Benefits in kind -these will show on form P11D. Benefits will include company car benefits, medical insurance, beneficial loan, and others.
  • Bank interest on personal bank accounts. This does not include ISAs.
  • Pension income -state pension or personal pension(s).
  • Government benefits include universal credit, employment and support allowance (ESA), and income support.
  • Rental property income details -include the total of your rental income and any expenses related to this.
  • Donations under Gift Aid.
  • Any personal pension contributions.
  • The details regarding child benefit received -you will receive thirteen four weekly payments each year if you receive this.
  • Payments into an employee share scheme.
  • Investments under Venture Capital Trust schemes, such as EIS.

Various examples of a Self Assessment error or mistake 

There are many examples of where you can make Self Assessment errors. If you file your return with incorrect details on it will effectively be a false Self Assessment tax return and it will then need correcting. Therefore, extra care and attention are required when you complete your tax return, either yourself or via your accountant.

If you miss the filing deadline 

A widespread mistake is missing the deadline, and this is quite common. It is also more likely to occur if you leave this until close to the filing deadline. Many accountants and tax experts are under pressure from their clients, who send them their tax return information at the very last minute. When you prepare your return at the last minute, it may become apparent that you have not included some information on this or that something else is incomplete. This could lead to your inability to file your return on time.

If you file the return yourself via the HMRC website, please do not forget to save your return as you go along. After completing all of the sections and questions within those, please also ensure that the return is sent online via their website. Once this has been done, they will confirm the receipt of this to you. 

Error in tax return -report your income incorrectly 

Whoever will prepare your tax return, you, or your accountant, please make sure that you double-check that the figures are correct. This can be another Self Assessment error if you do not check everything and something on your return is incorrect. You will need to ensure that you include all the figures for your income and reliefs. Income is typically salary and dividends and any other income. Reliefs are payments under Gift Aid, personal pension payments, and payments under Venture Capital Trust schemes such as EIS. If you miss including any of these it will result in Self Assessment errors.

If your accountant prepares your return on your behalf, please ensure that you check that all of the details are correct before signing off.

Self Assessment error or mistake -failure to declare all your income 

You must include all your taxable income on your tax return. Your income will consist of both revenue and any Capital Gains. Certain types of income that you may receive are not taxable and if you include these it will result in Self Assessment errors. These items include:

  • ISAs.
  • UK Government Gilts.
  • Premium Bonds.
  • Betting winnings.
  • Lottery winnings.

You complete the wrong box or boxes

There are many questions on a UK tax return. Therefore, you must be very careful when you complete this so that you do not make a Self Assessment error or mistake. In most cases, a business owner will let their accountant take care of their tax return.

You forget to include supplementary pages 

Another common mistake on Self Assessment is to overlook to include any supplementary pages with your return. You may need to submit extra pages with this if you have other income. These additional pages will include:

  • Interest from gilt-edged and other UK securities.
  • Life insurance gains.
  • Share schemes.
  • Employment lump sums or any compensation payments from a previous employer.
  • Stock dividends, non-qualifying distributions, and loans that you write off.

Mistake on tax return -you forget to sign and date this 

You may be one of the few that still send your return in through the post by 31 October. This date is three months earlier than the online filing deadline of 31st January. If you do this, please make sure that you sign and date the declaration before you send this to HMRC. Dating it after is another tax return error that some will make when sending in a paper tax return.

HMRC guidance -Self Assessment error or mistake

HMRC have a page on the web which covers HMRC errors and mistakes guidance. This covers various aspects on how you can change or amend your return and is very useful if you find you have made a mistake. It is useful to visit this HMRC errors and mistakes guidance page, should the need arise.

Paying your tax bill

When you pay your tax bill each year you need to pay the correct amount by the due date of 31 January following the tax year-end. The reference to quote with your payment is your ten-digit SA UTR followed by a capital K. Obvious to state if you quote an incorrect reference HMRC will not be able to allocate this to your account and the payment will then go astray. Therefore, it is important to quote the correct reference with your online payment.

Potential penalties for mistakes on tax return 

HMRC will charge penalties for Self Assessment errors which include late or inaccurate tax returns. They also charge penalties when a taxpayer pays the tax that is due late. Therefore, it is key to make sure that you get this right.

If you cannot pay your penalties or tax liabilities, you will need to contact HMRC.

Overpayment relief 

If you believe you have overpaid your income tax in a previous year there is a certain process to follow when you apply to HMRC for overpayment relief. This page takes you to the HMRC article that gives more detail regarding this.

Final thoughts 

Your tax return needs filing every 12 months, and a tax return error can occur if you or your accountant are not careful when you complete this. This article covers many of the errors that may occur and explains what to do if you make an error. You can also refer to HMRC errors and mistakes guidance as mentioned earlier for official guidance. Therefore, please make that you give your tax return detailed review before you or your accountant submit it to HMRC.

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