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Avoiding common self-assessment tax return errors

Any limited company and or contractor, you will likely have to sit down and get to grips with your Self Assessment Tax Return (SATR) before 31st January next year. No surprises but the annual task of compiling and submitting your SATR can be a real chore. The important thing is that you don’t make any errors, which are easy to make if you are unprepared.
Below are some common SATR mistakes to avoid, by focusing on the ‘what not to do’ when it comes to filing your return.

Inaccurate figures

If you are submitting your return yourself, you must double-check all the figures you use. These are typically:

  • Your salary
  • Dividend
  • Other income’ data

If your accountant is filing on your behalf, you are still ultimately responsible for the accuracy of the data, so you should take responsibility for checking the draft SATR before signing it off. Any submission of inaccurate figures can lead to lead to significant penalties.

Filing deadlines

After going to the work of filling in all your details, don’t forget to press ‘send’! Government systems allow you to save your form and come back to it at a later date, but you must ensure you don’t forget about the process and not send the information. You have until 31st January after the tax year’s end to submit online, but failure to do so promptly could result in penalties being issued. Information on the deadlines and penalties for missing them can be found on the HMRC website.  

Date and sign!

If you’re submitting a paper return, which is quite unusual these days, you might be in a rush to get it sent off in order to beat the deadline (31st October), but you must not forget to sign and date the document, as failure to do so could result in the invalidation of the form. You’ll find that failure to sign tax documents is generally one of the most common mistakes committed on a paper tax return.

Include supplementary pages

HMRC will prompt you to submit supplementary pages to include information on additional income, which is not part of your main tax return. Don’t overlook these, as they are an important addition to your return. These include:

  • Interest from gilt-edged and other UK securities, deeply discounted securities and accrued income profits
  • Life insurance gains
  • Stock dividends, non-qualifying distributions and loans written-off
  • Business income receipts taxed as income in a previous tax year
  • Share schemes, employment lump sums or compensation payments from your previous employer, etc.
  • Other tax reliefs (e.g. if you’ve invested in Venture Capital Trust schemes, or EIS)

Wrong Unique Taxpayer Reference (UTR) or NI number

You could invalidate your SATR by incorrectly recording either your UTR or National Insurance number.

You can find your UTR on previous correspondence from HMRC if you have previously filed online, and if not, you (or your tax specialist) should register for SATR allowing for at least 10 working days for HMRC to send you your UTR.

Your NI number will have been issued to you when you started working (and will be present on any number of old tax documents in your possession).

Declaring all income

All relevant income or capital gains must be declared on your income tax return. If you omit information for any reason, you could be face penalties, particularly if you are subsequently found to have deliberately under-represented your income.

The following types of income must be declared on your tax return:

  • Salary from all types of employment during the year
  • Dividend income
  • Any Government benefits
  • Income from pensions
  • Income from letting out properties
  • Interest on any savings
  • Any foreign income (you will need proof if tax has already been paid overseas)
  • Employee share schemes
  • Any capital gains

Certain types of income you may have received do not have to be reported, including ISAs, National Savings, Premium Bonds and prize winnings.

Poor record keeping!

You should keep all relevant paperwork in a safe place to ensure you have everything you need to complete your SATR accurately, as per the list above.

Here is a list of some typical documents a typical self-employed person will need:

  • Salary and benefit-related HMRC paperwork, including P60, P11D and P45
  • Records of any student loan payments paid
  • Records of any payments into a pensions scheme
  • Records of any payments into an employee share scheme
  • Details of all income derived from property, such as rentals and any allowable expenses
  • Any child benefit received throughout the year
  • Bank statements showing any interest paid (and any basic rate tax already deducted)
  • Any charitable gifts made during the tax year (to claim tax relief)
  • Dividend tax vouchers (from your own company, and any others)