5 most common mistakes made on tax returns

Knowledge base from Boox

By Lynne Gowers on 7th January 2014

5 most common mistakes made on tax returns

Tax return time is a stressful period for most of us. Have I got all the records I need? What if I forget to include something vital? Most crucially of all, have I put enough money away to pay my bill? These are the questions that keep many a contractor awake at night as January creeps to its wintery end.

Making simple, avoidable mistakes on your tax return can cause delays in calculating what you owe – or are owed – and string the agony out for longer than is really necessary. Here are five common mistakes that you may kick yourself for making.

Most common mistakes made on tax returns

Not signing or dating your tax return form

A classic error on paper returns, according to HMRC. Your tax return is an official document and its content can have legal ramifications. That’s why inspectors need your confirmation that your return is an accurate summary of your financial status at the time you completed it – and that you are prepared to stand by it.

The wrong tax reference number

Misquoting your unique tax reference (UTR) on your return could cause a significant delay in processing your return. It can also affect the way any online payments you make to HMRC are tracked, leading to lengthy phone calls and the printing off of proof-of-payment documents to get your tax affairs back in order.

Not completing all the necessary pages

There are separate pages for different types of employment and income sources in your tax return. For example, if you were self-employed for all or part of the financial year in question, there’s a specific set of questions for this work. If you had any PAYE employment at any time in the same year, you’ll need to complete a separate form. The same applies to income from any property you rent out, dividends from share ownerships, capital gains and so on. Avoid costly errors by making sure you declare everything.

Getting your numbers wrong

Every figure you enter in your tax return has a bearing on your final statement, yet it’s easy – especially under pressure – to make mistakes. Common number errors include quoting net (post tax) instead of gross (pre-tax) figures, entering figures into the wrong places (income into expenditure boxes or vice versa) and, potentially the most catastrophic of all, misplacing the decimal point.

Tax return notes

If your tax return shows a huge drop in your profits from the previous year, it’s a mistake to assume it will go unnoticed by the HMRC inspectors. Cover yourself and avoid delays, or even a tax enquiry, by accounting for the anomaly in the spaces provided in the tax return form. Did you lose a major client, incur some exceptional costs or have to take time off unpaid for personal reasons? Explain all.

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