| It is now quite possible to complete simple tax | | | | Probably the most common error we see when |
| returns online and many people still use paper | | | | prospective clients bring in a tax return they filed |
| returns. However, it is easy to make mistakes or | | | | themselves that is being investigated is a large |
| omissions that could result in an HMRC tax | | | | proportion of self employed expenses recorded |
| investigation or cost you money by paying too | | | | simple as other. So we see income as, say |
| much tax unnecessarily. Listed below are some of | | | | £40,000 and total expenses of |
| the most common errors we come across in the | | | | £8,000 of which £6,000 is recorded |
| course of the hundreds of clients we see each | | | | as 'Other'. It immediately begs the question as to |
| year together with some advice on how to avoid | | | | what these expenses are that cannot be put into |
| problems. | | | | the specified categories on the tax return and |
| 1. General - Incorrect Dates | | | | make provoke an investigation into whether they |
| It is so easy to report dates that do not fit within | | | | are legitimate. |
| the tax year you are reporting on. If you do that | | | | 4. Residence - Making Sure You Make a Domicile |
| then the tax return will be rejected. Remember | | | | Claim |
| that if you are self employed you have to find an | | | | If you are resident in the UK but not domiciled |
| accounting year ending in the tax year in question | | | | here you may be entitled to claim the remittance |
| to report on. If you are reporting savings interest | | | | basis for overseas earnings. In other words, this |
| or share dividends, they need to have a tax date | | | | non-UK income is only taxed in the UK if it is |
| before 5th April in the relevant year. Simple | | | | transferred into the UK. But you must make the |
| mistakes here can use problems. | | | | claim to be non-domiciled in the tax return for the |
| 2. Employment - Reimbursed Expenses Not | | | | remittance basis to apply. It can be an expensive |
| Claimed | | | | omission if you fail to do this. |
| When you receive reimbursement for work | | | | 5. Capital Gains - Failing to Claim Losses |
| expenses, these will be reported on the form | | | | Capital losses must be claimed on your tax return |
| P11D which will be issued to you when the tax | | | | within a specified number of years if they are to |
| year is over. This is then recorded as a benefit in | | | | be offset in the future against capital gains. Once |
| kind on the Employment pages of your tax | | | | you have made the claim you can offset the |
| return. All too often, that is where taxpayers | | | | losses against a gain at any time in the future. But |
| stop; and they then are charged tax on the | | | | if you fail to make the claim for losses, you do |
| reimbursed expenses! You have to remember to | | | | eventually lose the benefit so do it straight away |
| also record the expenses as an expense as well | | | | in the year the losses occur. |
| as a benefit. Then the two cancel each other out | | | | A little care can save unnecessary trouble and |
| in the calculation and you do not have any | | | | expense so complete your tax return carefully. If |
| additional tax to pay. | | | | in doubt about what to do, you should consult a |
| 3. Self Employment - A Large Claim for 'Other' | | | | professional advisor. |
| Expenses | | | | |