5 ways to avoid penalties on your Self-Assessment Tax Return

Navigating the world of personal tax can be challenging, especially when it comes to filing your self-assessment tax return. Understanding the intricacies is crucial to avoiding pitfalls that could lead to penalties from HM Revenue and Customs (HMRC).

These are some of the most common failures that we witness people making each year. The common thread is that they are all entirely avoidable.

Missing the Self Assessment Deadline

One of the most common errors is simply missing the deadline for the self-assessment tax return. For those who are filing online, the deadline is January 31st following the end of the tax year. Missing this date can result in an immediate £100 fine, and additional penalties can accrue over time.

Incorrect or Incomplete Information

Another frequent issue is providing inaccurate information. This could be an incorrect income figure, incorrect personal details, or failing to declare all sources of income, including freelance work, dividends, or even income from abroad.

Not Claiming All Allowable Expenses

Many people underclaim when it comes to expenses that could lower their tax bill. This is particularly common among freelancers and self-employed individuals. Always make sure you understand what expenses you can legally claim.

Calculation Errors

Miscalculations can also trip up a lot of individuals. While HMRC’s online system does some of the maths for you, it’s essential to double-check your figures. An error could either result in you paying too much tax or potentially facing penalties for underpayment.

Not Keeping Records

Keeping thorough records of your income and expenses is crucial for completing an accurate self-assessment tax return. If HMRC decides to investigate, you’ll need to provide evidence of your reported figures.

What if things go wrong?

How Do I Correct a Mistake on My Self-Assessment Tax Return?

If you discover an error after you’ve submitted your self-assessment, you do have the ability to correct it. If you filed online, you can log back into your HMRC account and amend your tax return within 12 months from the original deadline. If you filed a paper return, you’ll need to write to HMRC explaining the mistake and how it should be corrected.

Can I Edit My Self-Assessment Tax Return After Submitting?

Yes, you can edit your self-assessment tax return after submitting it. However, amendments must be made within 12 months from the original deadline for the tax year in question.

Do HMRC Check Self-Assessment Returns?

HMRC does have the authority to check self-assessment returns. They can open an inquiry if they believe there are inaccuracies. This can be done at random or triggered by inconsistencies in your tax return.

Completing your self-assessment tax return accurately is crucial to avoid penalties and potential investigation by HMRC. Be diligent, double-check your work, and seek professional advice if needed. It’s always better to be safe than sorry when dealing with personal tax matters.

Please get in touch with us if you have questions regarding your self-assement tax return. We can help at any stage, from preparation, to filing, and even if you have an investagation from HMRC.