Completing a self-assessment tax return is fairly straightforward but if you’re distracted or in a hurry, it’s easy to make these common mistakes.

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Self assessment tax returns – also known as personal tax returns – are filed for the period 6th April through to 5th April each year.

You need to complete a self-assessment tax return if you have any income that has not been taxed at source or at the correct rate.

If you have made a mistake while completing your self-assessment or just want to be sure you are avoiding common errors, here are five things you should check.

Common self-assessment tax return mistakes

1. Ignoring taxed at source income

If you have any income that is taxed at source, this must be declared on your self-assessment tax return. This includes salary from all types of employment during the tax year and pension income. Although it may be taxed at source, this information will still need to be declared on your personal tax return.

The self-assessment must declare all types of income from all sources (e.g. dividends, bank interest, salary, form P11D, benefits, pension, foreign, property).

2. Entering inaccurate figures or incorrect information

The most common mistake people make is accidentally adding extra digits or incorrect data in a tax return. It’s important that you check all figures and expenses entered on the return are correct before signing.

It’s also important to check you have entered the correct National Insurance Number and Unique Tax Reference (UTR) on the tax return. The tax return is deemed as your responsibility by HMRC even if an agent (or accountant) completes this for you.

3. Student loan repayments

Student loan repayments must be declared through the self-assessment system if:

  • your earnings are over £17,775 (for the tax year 2017/18), regardless of whether this is from employment or self-employment
  • you have other income totaling over £2,000 a year (eg, dividends, foreign income)

Student loan repayments are due at a rate of 9%.

4. Declaring child benefits for income above threshold

Child benefits must be declared on your self-assessment, especially if your income for the tax year exceeds the threshold of £50,000.

If you are a parent and your income exceeds £50,000, you will need to pay back an element (or all) of the child benefit as income tax via your self-assessment. The parent with the higher income will be responsible for paying the tax charge.

5. Not claiming eligible relief amounts

When you complete your self-assessment tax return, you need to check you have declared gross amounts (ie, inclusive of VAT) for pensions and charitable donations.

A common mistake people make is entering the net figure of employee personal pension premiums instead of the gross figure on the return. This means that you are claiming insufficient relief where higher rates of tax are payable.

It’s also worth claiming gift aid for any donations made to registered UK charities.

Addressing self-assessment errors

The most serious mistake people make is not addressing errors HMRC highlights to them. You have 12 months from the submission deadline to correct any errors made on the return before you start to incur penalties.

A penalty may be imposed due to an inaccurate tax return and if a return contains more than one error, a penalty may be charged for each error.

The amount of the penalty will depend on the potential lost revenue to HMRC as a result of the inaccuracy in the tax return.

Penalties are assigned proportional to the number of errors and are categorised as:

  1. Careless as up to 30%
  2. Deliberate but not concealed as up to 70%
  3. Deliberate and concealed as up to 100%

It’s important to get your self-assessment tax return right to avoid any penalties and we recommend completing it as soon as you can. This way you will be much more likely to ensure you pick up any errors as you won’t be rushing to meet submission deadlines.

We also recommend you ask an accountant to review your self-assessment tax return before you submit it to ensure your answers will satisfy HMRC requirements.

Cobia Accounting have plenty of experience completing self-assessment tax returns and know just what to look for when reviewing your submission. Whether your accounts are behind or your submission deadline is approaching, we can help with your self-assessment. To find out more, contact us today.