It is more than common to do mistakes during the process of tax payment. There are several reasons and for many of them are repeated every year by the UK citizens. Tax payment and returns become quite more complex when you own a business.
It is hard to keep a balance between perfect accountancy throughout the year and tax return management system. What if you commit some mistake?
The obvious answer is that HMRC would fine or penalize according to the severity of the mistake. If you own a business and wish a stress-free tax year, hire professionals for tax planning companies.
Her Majesty’s Revenue and Customs is the Department responsible to collect all the taxes. In case of a mistake or fraudulent practice, they will file a penalty against you.
HMRC has two basic targets. The first one is to increase the extent to which businesses and individuals pay due taxes and rightfully receive the credits and payments.
The second one is to improve the UK business environment and customer experience. Any action, not in compliance with these two targets, is going to cost you.
An easy to assume a fact is that no one wants to pay an extra penny in tax payments. Here are the 5 common mistakes that cause the end-of-year tax to fail and you end up paying more or getting less.
1. Missing The Deadlines
HMRC is a law enforcement agency and has a strong and unfailing cadre of Criminal Investigators. They are responsible for investigating revenue of criminal offenses. If you are missing the deadlines or ignoring them at the worst, you can’t go roaming around.
End-of-year tax dates are announced ahead and provide a good frame of time for unambiguous tax planning. If you are habitual of leaving things for the last minute, high chances are that you might miss the deadlines.
The deadline for online filers is 31 January and you have to pay till the midnight of 31 January. For traditionalists who prefer mailing, the deadline is a few months ahead i.e. 31 October.
If you have valid reasons for missing the deadline, you must report them to HMRC. If you are receiving a Tax Return you are legally bound to fill it even you believe none of your money has to be taxed.
2. Incorrect/Missing Information
It is too obvious that one needs to fill accurate information in all required fields. Even then, a lot of people fail to do so. Make sure that your National Insurance number and Unique Tax Payer Reference are entered correctly. It is crucial to get them right. Do not forget your signatures.
3. Failure To Declare Income And Capital Gains
You need to declare income from employment, pension, interest, property income, foreign income, capital gains, dividends, and benefits.
Landlord property in Bromley must be declared. In the case of foreign income, you must mention the taxes you have already paid on them.
If you fail to declare any of these you might face serious consequences. For deliberate errors, you can be prosecuted at right terms.
There are tax exemptions on certain sources of incomes. Few of them are bonuses, interests or dividends from investments in Nationals Savings and Investments Savings Certificates and ISAs.
The interest and terminal bonuses from schemes such as “Save As You Earn” are tax exempted. The interest provided by the UK Government as part of an award of damages or death is tax-free.
4. Claiming False Deductibles
When you are filing a tax return, you must be sure of the possible claims. If you are found to claim false deductibles you might fall in trouble. The Government rules are complex indeed and are subject to revision. There can be things you thought could be claimed.
To avoid the hassle and become a tax-efficient citizen, hire professional for filing tax returns.
5. Not Including Supplementary Pages When Required
If you have additional income which is not covered by the main tax return pages you must include the supplementary pages.
The additional information required can include life insurances and income from share schemes. Avoid these common mistakes to go through a peaceful year!