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Self-Assessment Tax Returns: Avoid These Costly Errors

Don't let simple mistakes on your self-assessment tax returns lead to costly penalties. This guide outlines the most common errors and provides tips on how to file correctly.<br><br>

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Self-Assessment Tax Returns: Avoid These Costly Errors

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  1. Services EngagementModel ReferralProgram Resources ContactUs Self-AssessmentTaxReturns,SATR August 7, 2024 TopMistakestoAvoidonFilingSelf-Assessment TaxReturns TableofContents 1.TopMistakestoAvoidonFilingSelf-AssessmentTaxReturns 1.1. Whenisthedeadlinefortheself-assessment? 1.2. MistakestoAvoidWhileFilingYourSelf-AssessmentTaxReturn 1.2.1. IncorrectUTRorNInumber 1.2.2. Non-disclosureofPensionContributions 1.2.3. FailuretoDeclareAllIncomeSources 1.2.4. MakingaClaimforNon-allowableCharges 1.2.5. MissingOutonTax-freeAllowances 1.2.6. FailingtoMeettheDeadline 1.2.7. FeelfreetoConnectwithUs HMRCusestheSelf-assessmentsystemtocollectincometax. Peoplewhohavemademoneythat HMRCisn’tnowawareof, likeprofitsfromabusiness, aretypicallyrequiredtorecordthatmoneyina Self-Assessmenttaxreturn. Hi are available to chat, so if you have any questions or need help, just ask! Our real human operators Theindividual’searningsforataxyearandthesourcesofthoseearningsaredisplayedontheirtax return. EveryyearonJanuary 31, atmidnight, mostbusinessownersmustproduceataxreturn, sendit toHMRC, andpaytheirtaxobligation. Whenisthedeadlinefortheself-assessment? Thedeadlineforfilingtheself-assessmenttaxreturnisJanuary 31 eachyear. Thismeansthatyouhave untilmidnightonJanuary 31, 2025, tofileyourtaxesfor 2023–2024. Inaddition, alltaxesdueforthe previoustaxyear (aswellasyourfirstinstalmentofaccountpayments) mustbepaidbythisdate. protected by reCAPTCHA - Privacy - Terms Recallthatthisdeadlineonlyappliesifyousubmityourtaxesonline; ifyouwanttofileonpaper, you mustrememberadifferentdate. Continuereadingandnotethecrucialtaxyeardatesinyournotebook. Therearealsoothersignificant datesforself-employedandcorporationtaxreturns. MistakestoAvoidWhileFilingYourSelf-Assessment TaxReturn

  2. It’scommontofindyourselfrushingtofinishyourtaxreturnwhenthedeadlineapproaches. Many peoplecommitthemosttypicalmistakesintheannualrushtofilebeforetheSelf-Assessment deadline. Thesehelpfulguidelinescanhelpyouavoidthem. IncorrectUTRorNInumber EnteringtheincorrectUniqueTaxpayerReference (UTR) orNationalInsurance (NI) numberisoneof themostprevalenttaxreturnblunders. Insomecircumstances, thesearecompletelyexcluded. WhenyouregisterforSelf-assessmentorformalimitedcompany (CorporationTaxUTR), HMRCissues youaUTR. HMRCwillnotknowwhoyouareifyoudonotprovidethis 10-digitnumberwhen submittingyourtaxreturn. ItwouldbebestifyouusedyourpersonalUTRforyourSelf-assessment return, asopposedtoanyCorporationTaxUTRsyoumayhave. Whereyou’velostorforgottenyourUTR, youcanlookitupinyourPersonalTaxAccount, theHMRC app, priortaxreturns (whererelevant), orotherHMRCdocuments. Non-disclosureofPensionContributions Ifyoucontributedtoapensionduringthetaxyearyouarefiling, youmustincludethosecontributions onyourreturn. Therewillbeaboxforyoutofilloutregardingpensioncontributions. HMRC’swebsite hasmoreinformationconcerningtaxonprivatepensioncontributions. Gettingthisrightiscriticalbecauseyoumaybedeniedtaxreliefifyouclaimtohavecontributedtoo little. HMRCmayassessinterestonanyunderpaymentifyouoverestimateyourdonations. FailuretoDeclareAllIncomeSources Don’tonlylookatyourearningsfromemploymentorself-employment. Rentalincome, profit (capitalgains) fromsellingassetssuchasasecondhomeorprizedgoods, incomefrominvestmentsincompanyshares – paidthroughdividends – andeventipsorcommissions arealltaxableincomestreams. You’llalsoneedtorecordanyself-employedincomesupportprogramme (SEISS) fundsyougotafter April 6, 2021, and ‘donations’ frominternetplatformslikePatreon, Twitch, andKofi. Ifyoureceivechildbenefitandearn £50,000 ormore, youmaybesubjecttotaxation. Thehigh- incomechildbenefitfeeisataxrepaymentpaidat 1% ofthebenefit. MakingaClaimforNon-allowableCharges It’stemptingtotrytoclaimasmuchaspossibletoloweryourtaxburden, buttreadcarefully. Therewill besomethingsyoucannotclaimfor, suchasvacationsoranewtelevision. However, therearecertain greyareastobeawareof. Manybusinessownersmakethemistakeofbelievingthatsomeexpensesareallowedforeveryone. Therewillbesomeexpensesthatapplytoyourbusinessbutothersthatdonot. Fuelclaimsareacommonexample. Businessesthatmusttravelfrequentlycanclaimfuelandtravel

  3. expenses. Ahome-basedfirmthatdoesnotrequiretravelisunlikelytobeeligiblefortaxbreaks. MissingOutonTax-freeAllowances Bymaximisingyourallowances, youcanmakemoremoneybeforebeingrequiredtopaytaxes. Thepersonalallowanceis £12,570 forthe 2024-25 taxyear. Earningsbelowthisthresholdarenottaxed unlessyouearnmorethan £100,000. Inthissituation, yourpersonalallowanceiscutby £1 forevery £2 youearnabove £100,000. Ifyou’remarriedorinacivilpartnershipandoneearnslessthanthepersonalallowance, youmaybe eligibleforthemarriageallowance, 10% ofonespouse’sallowancepaidtotheotherspouse. Youmayalsobeeligibleforthepersonalsavingsallowance, whichcanbeallocatedtosavingsinterest (althoughnotIsas, whicharetax-free). Thenthere’sthedividendallowance, whichis £5,000 in 2024-25 andcanbeutilisedfordividendsand investments. FailingtoMeettheDeadline Puttingeverythingoffuntilthelastminuteincreasesthelikelihoodofmistakesbeingmade, forwhich HMRCmaypunishyou orofmissingthedeadlineentirely, whichmayresultinpenalties. Onewaytoreducethelikelihoodoffilinganincorrectreturnistoplan andtakethetimetofilloutthe form. Beginbycompilingallpertinentrecordsanddata, suchasyourP60 form (ifyouwork), bills, bank statements, tenancyagreements, studentloanstatements, receiptsandinvoices, detailsofanybenefits youhavereceived, andanyotherinformationpertinenttoyoursituation. Youmaybesubjecttosignificantfinesifyoudonotsubmityouronlinetaxreturnandpaythetaxes duebyJanuary 31. FeelfreetoConnectwithUs Filingyourtaxesforthefirsttimecanbedifficultandfrustrating, andmistakesarecommon. Doing yourresearchwellinadvanceiscrucialbecauseincompleteassignments, latepayments, andwrong informationcanprolongtheprocessandincurfines. Ifyou’reunsurehowtosubmityourtaxreturn correctly, seekingprofessionalassistancecanalsobeworthwhile. Wehopethisarticlehashelpedyouunderstandsomeofthemostcommonproblemspeopleface whilefilingtheirself-assessmenttaxreturns. TopMistakestoAvoidonFilingSelf- AssessmentTaxReturns WhenistheSelfAssessmenttax returndeadlinefor 2018? Issuesonemightfacewhenfilingself assessmenttaxreturnsonline BY: Outbooks   

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