As the 31 January 2020 approaches its important to set time aside to complete your 18-19 self-assessment tax return and pay your tax bill (if you are required to submit a self-assessment by HMRC).
We wanted to share some common tax return errors, to help you get your return right.
- Incorrect figures – double check the figures you are reporting to ensure they are complete and accurate
- Not declaring all income or capital gains – you must ensure your self-assessment is complete and reports income or capital gains from all sources (employments, pensions, interest, dividends etc)
- Claiming for expenses that are not allowable – as a business owner it is your responsibility to ensure that the expenses claimed on your tax return are qualifying business expenses
- Entering incorrect UTR or National Insurance Number – ensure your personal information is correct so that there is no issue submitting your return (especially if you leave it last minute)
- Selecting boxes that aren’t applicable to you – ensure you only include relevant information on your tax return. HMRC publish guidance notes on their website to help complete your return correctly
If you do make a mistake on your tax return you’ve normally got 12 months from the submission deadline to correct it. This is called an ‘amendment’. If you realise after this date, then you will need to contact HMRC to discuss the best action to correct your return.
The penalties for late returns
- an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
- after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
- after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
- after 12 months, another 5% or £300 charge, whichever is greater
- There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months
At the beginning of the year, HMRC published some bizarre excuses they received from taxpayers as to why they didn’t submit their self-assessment return on time. To clarify, these excuses did not qualify as ‘reasonable excuses’;
- my mother-in-law is a witch and put a curse on me
- I’m too short to reach the post box
- I was just too busy – my first maid left, my second maid stole from me, and my third maid was very slow to learn
- our junior member of staff registered our client in self-assessment by mistake because they were not wearing their glasses
- my boiler had broken, and my fingers were too cold to type
Self-assessment is designed for individuals to complete. However, some people prefer to appoint an accountant to prepare theirs on their behalf. If you need help deciding whether you need to submit a self-assessment return or completing your self-assessment return, please don’t hesitate to get in touch with us to discuss. Missed deadlines or payments will result in penalties so please ensure you understand the deadlines and your responsibilities. If you need to change your return for whatever reason, then we can help with amended returns.
We would like to take this opportunity to wish all the Bay readers a Happy Christmas and a healthy and happy new year.
Allchurch & Co Chartered Accountants
www.allchurchco.com 07825 232218