20 Most Common Mistakes on the Tax Return
20 Most Common Mistakes
on the Tax Return
Online GST Return We all try and save money wherever
possible, some more than others. At tax return service co.uk we are of the
opinion that many accountants do over charge for completing "straight
forward" tax returns or accounts and tax returns.
Taxpayers sometimes endeavor to complete their own tax
returns and save money when being charged 300.00 when their turnover and
profits are relatively low and their tax affairs they believe relatively
simple. At tax return service co.uk we complete tax returns for only 49.95
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returns each day all year round within 24 hours of customers logging on and
completing their details on our specially designed website. Our tax advisory
team update continually with new tax legislation and new tax laws to keep
abreast of annual changes which affect completing a self-assessment tax return.
HMRC could enquire into a mistake or an error in your tax
return, this could be a genuine mistake where the tax payer has taken
"reasonable care" and is not a "deliberate" or
"concealed" error. It is just in all likelihood down to a lack of
knowledge when completing the tax return. Taxpayers do have to be careful
however, as even genuine errors, could and do lead to penalty fines.
HMRC looks very closely at errors or mistakes on tax returns
and deliberates on whether the error or mistake was genuine or due to a lack of
reasonable care or deliberate and concealing. The latter two HMRC treat as the
most severe and penalty fines can be one hundred per cent of the tax due and in
the worse cases up to seven years imprisonment.
When processing tax
returns, HM Revenue & Customs has found the ten most common mistakes are:
1. A 'yes' tick has been entered in one of the questions 1 to
9 on page 2 of the tax return but the supplementary page has not been forwarded
with the tax return.
2. Failure to complete the self-employed pages, particularly
on page SEF4 from box 64 onwards.
3. Detailing information on separate schedules instead of
including the information on the return.
4. Entering manuscript notes on the return i.e. "per
accounts" and/or "information to follow" instead of entering
actual figures on the form.
5. Failure to complete a separate supplementary page for each
individual employment.
6. Entering the net figure of employee personal pension
premiums instead of the gross.
7. Entering the figure of capital expenditure in Box 48 of
the Self Employment pages instead of the capital allowances (i.e. claiming
excessive relief).
8. Failure to enter bank account details on TR5 of the core
return where a repayment is due. The Revenue will assume you wish to leave the
overpaid amount on your record, to be set against future liabilities - you have
the right to choose.
9. Entering your pay in box 1 of the employment schedule but
not entering any tax deducted in box 2.
10. If you fail to sign a paper return, it will be rejected
immediately.
11. Depreciation is added to the tax return as an allowable
expense when completing the tax return and has not been put into the
disallowable common in addition.
12. The taxpayer has put in the full cost of a motor vehicle
as an allowable expense and not carried out a capital allowance computation.
13. The taxpayer has put in the full cost of a piece of plant
and machinery as an allowable expense and not carried out a capital allowance
computation.
14. A capital allowance computation has not been carried out
at all.
15. Personal Expenditure has not been "added back".
16. In the event of a loss on self-employment, it has been
ignored.
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