The deadline for paper tax returns is looming...Avoid these common mistakes
The countdown has begun for this years’ paper tax return, a crucial time for around 400,000 taxpayers who are self employed or those that receive other income that requires the submission of a tax return, which is normally rental income, interest or dividend income not covered by your personal allowance or the specific nil rate bands for the particular income recieved. It is also necessary to submit a tax return if you have realised capital gains on which a tax liability arises, or if you have made a loss on the disposal of a capital asset that you want to carry forward to set against future gains.
Midnight on the 31st October 2020 is the deadline for the submission of paper tax returns and the deadline for online returns is 31 January 2021. Whether a paper or online tax return is submitted, any tax due is payable on or before January 2021.
Wherever possible Moore (South) recommend that online returns are submitted, and not just because you have longer to deal with this, you also have the certainty of knowing that the return has been received by HMRC as soon as you have submitted it, and that any calculations issued by HMRC will be based on the figures included on the return. Here at Moore (South) we have compiled a list of the most common mistakes that people make when submitting their paper tax return, in order to make the process easier and ultimately avoid receiving penalties.
REMEMBER: The simple things
Always check and double check the dates and always remember to sign! It may sound obvious but it is sometimes the simplest of details that trip people up. You could have calculated every last penny of every last expense, organised every single bank statement and payslip, however all this effort could potentially mean nothing if you haven’t double checked that its dated and signed in the correct places.
REMEMBER: To enclose supplementary pages
For additional income not covered by the main tax return, you will need to include supplementary pages. Additional information which may be relevant includes:
· Interest from gilt edged and other UK securities, deeply discounted securities and accrued income profits
· Life insurance gains
· Stock dividends, non qualifying distributions or close company loans written off
· Income from share schemes
· Lump sums or compensation payments from your employer, or foreign earnings not taxable in the UK
· Taxable lump sums for overseas pension schemes
· Loss relief claims
· Income from property
· Capital gains and losses
REMEMBER: To maintain business records such as:
· Cash books
· Invoices
· Mileage records
· Receipts
· Bank statements
· Records of all sales and takings, purchases and expenses
· Money taken out of business for personal use
· Personal money put into business
REMEMBER: To write down your gift aid payments
You can tell the taxman about donations by filling in the relevant ‘gift aid payments’ section. Many people paying higher rates of tax may not realise that they can benefit from tax relief on donations too. By declaring any charitable Gift Aid donations you make on your self assessment tax return, you can claim relief equal to the difference between the higher rate of tax at 40% or 45% and the basic rate of tax at 20% on the total value of the donation.
What do I do if I make a mistake on my tax return?
If you realise you have made a mistake it is always a good move to fix it as soon as possible. In general, you will have 12 months after filing deadline to correct any mistakes.
If you are looking for advice please contact your local Moore (South) office.