Avoid Tax Return Errors

A million taxpayers are fined £100 every year for sending their tax returns in late – but millions more have their returns rejected because they make mistakes that have nothing to do with the figures.

It’s not surprising most taxpayers hate filling in their tax returns and rush the job without reading the form properly.

New rules mean the taxman can fine anyone who makes errors or forgets to include information – by accident or on purpose.

This is a list of the top 10 most common tax return errors:

1. Failing to sign the form

Only the person named on the form can sign except under exceptional circumstances.

Check Box 22 on Page TR6 before you post or deliver a return to your tax office to make sure the right person has signed and dated the form.

2. Not ticking all the boxes that need ticking

Some boxes need ticking ‘Yes’ or ‘No’, so make sure you give an answer if asked.

3. Not giving details of any money you are owed

Even if the taxman owes you some money, if you don’t ask for it, you won’t get it.

Fill in Boxes 4 – 14 on Page TR5 so HMRC knows where to send any money you are owed.

4. Tell the taxman about estimated figures

If you do not have the full figures, use the Additional Information section to give an explanation – that’s more than just writing in “More details to follow’. You need to explain why the figures are estimates, what you are doing to get the right figures, and when they will be available.

5. Fill in any supplementary pages

If you have to fill in extra pages, like details of self-employed or rental income, make sure you attach them to the tax return. A common error is forgetting to file the partnership return if you have filled in the partner pages of your own tax return.

6. Make sure your figures add up

Check your totals correspond to the figures entered in the boxes above that are added to make the total.

7. Savings interest is not a balancing act

Don’t put in the balance in your account if the taxman has asked for the interest earned on your savings.

8. Failing to divide joint income

Tax follows ownership of an asset – if you have joint income, split the amount between you and your spouse or partner according to how much of the asset each of you owns, like 50:50 or 60:40.

9. Don’t be a UTR idiot

If you send a cheque or letter to HMRC, make sure you clearly write your Unique Tax Reference number somewhere so the payment or message is matched to your file.

10. Resist the temptation to leave income off your return

HMRC trawl through PAYE files, bank records, council records, the Land registry, share registers and many other databases to tie up income with the person that has earned it – sometimes it takes years to make a connection but trying to evade tax is a crime and it’s likely to catch up with you sooner or later.

This article has been provided by tax expert Steve Sims author of ‘Understanding and Paying Less Property Tax For Dummies’