Common Tax Return Mistakes That Could Cost You Dearly

Completing a self-assessment tax return can cause stress and confusion, even for those who have done it before. Whether your tax situation is simple or complex, mistakes can lead to penalties, extra tax bills, or delays. Understanding common errors and how to avoid them helps you file accurately and stay on top of your tax responsibilities.

Reviewing tax documents carefully to avoid mistakes

Knowing When You Need to File a Tax Return

One of the biggest mistakes is not realising you need to file a tax return at all. Many people assume they only need to file if they are self-employed or have complicated finances. In reality, HM Revenue & Customs (HMRC) requires a tax return in several situations, such as:

• Earning income from freelance or side jobs

• Receiving rental income from property

• Having income over certain thresholds not taxed at source

• Claiming certain tax reliefs or expenses

  
  

Failing to register on time can lead to penalties and interest charges. Register as soon as you know you need to file to avoid unnecessary costs.

Including All Your Income Sources

A common error is missing income on your tax return. HMRC receives information from banks, employers, and platforms like AirBnB & Uber so omissions are often detected. You must declare all taxable income, including:

• Bank interest (excluding tax-free ISAs)

• Child benefit received, if the High Income Child Benefit Charge applies

• Earnings from freelance or side work, even small amounts like £100

• Student loan deductions

• Dividends and investment income

• Cryptoasset disposals

• Profits from selling assets

• State pension income

  
  

For example, if you rented out your home for part of the year, you must include rental income plus any other income sources. Leaving out even small amounts can trigger HMRC enquiries or penalties.

Understanding Tax Reliefs and Allowances

Another mistake is not claiming the tax reliefs and allowances you are entitled to. This can lead to paying more tax than necessary. Common reliefs include:

• Business expenses if you are self-employed or have freelance income

• Marriage Allowance if you qualify

• Pension contributions

• Gift Aid donations

  
  

Make sure you keep records and receipts to support any claims. If you are unsure which reliefs apply, consult HMRC guidance or a tax professional.

Filling out a tax return form carefully to avoid errors

Avoiding Simple Errors and Omissions

Simple mistakes like entering incorrect figures, missing signatures, or submitting late can cause problems. Double-check your entries for accuracy and completeness. Common pitfalls include:

• Transposing numbers or decimal points

• Forgetting to sign or date the return

• Missing deadlines for submission or payment

• Using outdated forms or software

  
  

HMRC charges penalties for late filing and late payment, which can add up quickly. Set reminders and allow plenty of time to complete your return.

Keeping Good Records

Good record-keeping makes completing your tax return easier and more accurate. Keep documents such as:

• Bank statements

• Payslips and P60s

• Receipts for expenses and donations

• Rental agreements and income records

• Investment statements

  
  

Organising these throughout the year reduces stress and helps you avoid missing important information.

When to Get Professional Help

If your tax affairs are complex or you feel unsure, consider hiring an accountant or tax adviser. They can help you:

• Identify all income and reliefs

• Avoid mistakes and penalties

• Submit your return on time

• Plan for future tax years

  
  

Getting expert help can save you money and give peace of mind.

Get in touch with S K PUNIA ACCOUNTANTS LLP.