Their advice includes remembering to sign and date your form, including the correct business address, filling in your tax return number on every page and checking the form thoroughly.
There are other common mistakes however that could be costing you money and we’re looking at them more closely here. Some of these errors may not apply to you but it can’t hurt to fully understand them all in case they ever become applicable.
1. Employment Benefits
The most common mistake made on self-assessment tax return forms is usually any employment benefits. This can be things such as company cars and medical insurance. They may seem obvious but it’s amazing how many times people forget.
It is very common for many business owners to completely forget to include their pension contributions at all when filling out their form or enter an amount which doesn’t seem to tally up. The majority of pension contributions are paid on a net basis to the provider so there is a different between the net contribution and the gross contribution. These figures are regularly confused.
3. Foreign Income
Foreign income is still income so it must be declared. Even if it’s only a tiny amount you must include all foreign income on your tax return and in many instances it won’t increase your overall tax bill as often you can get credit for the foreign tax paid.
4. Capital Losses
When looking at capital gains tax many people make an error when it comes to the losses. Claiming capital gains losses means you can carry the loss forward and reduce capital gains tax in future years. Leaving them out may mean you pay more in the long run.
5. Wear and Tear Allowance
If you make any income from renting then you may not even know about the wear and tear allowance. This is one of those instances where most people don’t even claim rather than not declaring enough. You can reduce your taxable rent by 10% on furnished lettings by simply claiming your wear and tear allowance annually.
6. Small Dividends and Interest
Your tax return is supposed to include every source of income so your tax bill is 100% correct. This means you need to include the interest and dividends from small deposits and shareholdings. Low income earners may also be able to reclaim some of the tax credit on their deposit interest up to a maximum of £1600 per year. It pays to be conscientious and looking through every small account detail will ensure your records are complete and your tax return is filed correctly.
All of these points are particularly important if you’re choosing to complete your tax return without the support of an accountant or financial advisor. Even if you do it helps to have a working knowledge of the self-assessment process to ensure your accountant has all the information they need to file your return correctly.
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