Around 11 million people have to submit self-assessment forms before the January 31 deadline.
You need to do one if you’re self-employed, a company director or a partner in a business. If you’re employed but earn untaxed income outside of your regular employment, you’ll need to do one too.
Higher-rate taxpayers claiming relief on pension contributions might also need to submit a return and if you earn more than £50,000 and claim child benefit you need to fill out a form to pay some, and potentially all of it back.
We have listed below five common errors often found on a Self-Assessment, bearing in mind that these errors will attract fines and penalties, it is essential you self-assess correctly:
- PPI Claims
If you were mis-sold payment protection insurance and have successfully claimed it back, the firm who sold it to you may be giving you interest of 8pc p.a which is designed to compensate you for not having the money you spent on the policy.
You have to pay tax on this interest and it should be included in your self-assessment form.
- Student Loans
If you have outstanding Student Loans and your income, including non PAYE attributes such as dividend and savings income exceed £17,495, you will need to make repayments on amounts that exceed this threshold at a rate of 9%.
- Gift Aid
Through gift aid, charities can claim a basic rate of tax on your donations. If you’re a higher-rate taxpayer, you can claim back the rest of the tax you have paid on charitable donations by including them on your self-assessment form.
Donations include annual memberships of charities such as the National Trust and English Heritage, as well as entrance fees for attractions such as zoos.
- Dividend Gross up
2015/16 is the last tax year where dividends carry a 10% tax credit, in order to claim the tax credit, the dividend should be grossed up. This often causes confusion as it does not reflect the amount of cash received. It is essential this calculation is performed correctly and that dividend vouchers and meeting minutes from private limited companies are produced and maintained.
- UTR Registration
Registering to file a tax return is often overlooked when a person becomes a director of a limited company. The statutory obligations of being a Director includes the filing of Self-Assessment tax returns, regardless of the fact that no income may be drawn from the company.
If you are required to file a self-assessment tax return this year contact us for comprehensive advice and compliance service that will ensure you file the correct, complete assessment utilising maximum reliefs and exemptions available.
HMRC are now driving 98% of enquiries from their CONNECT database and failure to report any income will be flagged by this ever increasing database.
We have accountants in Essex and Canary Wharf waiting to hear from you.