Common Mistakes in Personal Tax Returns (and How to Avoid Them)
Filing personal tax returns can be stressful, especially when you’re trying to ensure everything is accurate and compliant with HMRC regulations. At Welf Accountants, we’ve seen many taxpayers make avoidable mistakes that could lead to delays, fines, or even audits. To help you stay on the right side of tax law, we’ve outlined the most common errors people make on their self-assessment tax returns and how you can avoid them.
1. Missing the Self-Assessment Deadline
One of the most frequent mistakes is missing HMRC’s self-assessment deadline. The deadline for online filing is 31st January each year. If you miss this, you could face an automatic £100 penalty, with additional charges for prolonged delays.
How to Avoid It:
• Mark the deadline on your calendar and set reminders.
• File your return early to avoid last-minute stress.
• Work with a professional accountant for timely submissions.
2. Incorrect Personal Information
Errors in personal details such as your name, address, or National Insurance number can cause issues with HMRC processing your return properly.
How to Avoid It:
• Double-check all personal information before submitting.
• Ensure any changes in your circumstances are updated with HMRC.
3. Failing to Report All Income Sources
It’s crucial to declare all sources of income, not just your primary salary. This includes:
• Self-employment earnings
• Rental income
• Dividends and investment income
• Foreign income
• Capital gains
How to Avoid It:
• Keep a record of all income streams throughout the tax year.
• Consult a tax advisor if you have multiple income sources.
4. Claiming Incorrect Expenses
Claiming ineligible expenses or failing to claim allowable expenses is a common mistake for self-employed individuals. Common allowable expenses include:
• Office supplies
• Business travel
• Professional fees
How to Avoid It:
• Familiarise yourself with HMRC’s expense guidelines.
• Keep all receipts and invoices as proof.
5. Overlooking Tax Reliefs and Allowances
Many taxpayers miss out on valuable tax reliefs and allowances, such as:
• Personal Allowance (£12,570 for most taxpayers)
• Marriage Allowance
• Pension Contributions
• Gift Aid
How to Avoid It:
• Research available tax reliefs or seek professional advice.
• Use tax calculators to determine eligibility.
6. Math Errors and Calculation Mistakes
Simple calculation errors can result in inaccurate returns, leading to underpayments or overpayments.
How to Avoid It:
• Use HMRC’s online filing system, which auto-calculates many figures.
• Consider using accounting software or hiring a professional.
7. Not Keeping Adequate Records
HMRC requires taxpayers to keep financial records for at least five years after the filing deadline. Poor record-keeping can lead to difficulty in justifying claims or proving income.
How to Avoid It:
• Maintain digital and physical copies of receipts, invoices, and statements.
• Implement a structured filing system for your documents.
8. Failing to Declare Side Income
With the rise of the gig economy, many people have secondary income from platforms like Airbnb, Uber, or freelance work. This income is still taxable.
How to Avoid It:
• Report all side income, even if it’s from a hobby.
• Understand the £1,000 trading allowance for small side gigs.
9. Forgetting to Sign and Submit
This may sound basic, but forgetting to submit your return after completing it online or failing to sign a paper return can invalidate your submission.
How to Avoid It:
• Always confirm submission after filing online.
• Look out for a confirmation message from HMRC.
10. Trying to Handle Complex Returns Without Professional Help
If you have complex finances, such as property portfolios, foreign income, or inheritance issues, filing alone could increase the risk of costly errors.
How to Avoid It:
• Consult with a qualified accountant.
• Welf Accountants can help ensure accuracy and compliance.