‘Common tax mistakes’ that risk £100 fine from | European Markets

As numerous Brits scramble to file and pay their tax returns earlier than the looming deadline, chartered finance professional Tom Drury from The Traders Centre has cautioned that many is likely to be inadvertently making important blunders that would hit their wallets arduous, and never simply on account of fines for lateness.

He suggested: “Many mistakes can be easily avoided with a little preparation and attention to detail.”

Drury pinpointed the highest six frequent errors people commit on their tax returns and provided options to rectify them earlier than the tax deadline this Friday, January 31. The primary key error is failing to say all eligible bills.

He defined: “While trying to get your return done as quickly as you can, you might overlook allowable expenses and deductions, meaning you’re paying more tax than you need to be.

“From workplace prices like cellphone payments and stationery, to workers salaries, or a portion of prices like heating and electrical energy when you work from home, allowable bills could be deducted to work out what your taxable revenue is.” However, he also cautioned against claiming incorrect expenses, particularly when business and personal expenses are mixed.

For instance, if one phone is used for both business and personal calls, you cannot claim the entire phone bill because it wasn’t used exclusively for business purposes.

One of the simplest methods to make sure your tax return is accurate is by maintaining “meticulous data of your financial transactions all year long”.

The specialist advised to begin this practice “as quickly as you resolve to change into self-employed” but those who may not have been quite as orderly, he suggested: “You possibly can submit an estimate. Simply make sure to ship any corrections within 12 months of the self-assessment deadline so your invoice could be adjusted. You’ll both pay more tax or be capable to declare a refund.”

Tom cautioned one of the biggest mistakes with a simple fix is not double-checking before pressing send on your return: “A spelling mistake there, a mistyped determine right here. It’s important to be correct, and double-check all data earlier than submitting, in any other case you’ll finish up paying an excessive amount of, or not paying practically enough and be confronted with a hefty invoice later down the road, simply because of a small error.”

As the deadline looms, with just under five days left, the expert reminded urged people not to procrastinate their tax returns until the eleventh hour. He warned that it can “take longer than you suppose, particularly when you realise a little too late that you just’re lacking important data”.

As a substitute, he inspired people to start their return course of effectively prematurely to keep away from lacking the deadline fully, which incurs a hefty £100 penalty from February 1. In case your return hasn’t been submitted and paid three months later, further penalties will begin accruing each day, together with curiosity in your excellent taxes.

HMRC’s self-assessment deadline is January 31, marking the date each liable Brit must have filed and paid their taxes. Those that need to pay these dues sometimes earn an income that is not mechanically taxed, resembling self-employed people, these incomes rental income, and even facet hustlers incomes over a specific amount.