The tax return deadline is less than a week away. But don’t risk making a costly error by rushing through it – mistakes have caused 25% of taxpayers to pay too much tax, Which? research has found.
A Which? survey of taxpayers who submit self-assessments found that a significant number struggle with their returns and had made errors or faced fines in the last three years.
We explain how you can avoid mistakes on your return this tax season and submit before the 31 January deadline.
Tax return errors lead to overpayment
A quarter of people who complete tax returns think they’ve overpaid HMRC in the last three years as they’ve overestimated their income, or missed valuable deductions, according to a survey by Which?.
A further 4% think they may have under-declared their income, leaving them at risk of further penalties for tax evasion or failing to take due care.
Young taxpayers are more likely to slip up, with as many as 41% of 18-24 year-olds thinking they may have overpaid after making a mistake on their declaration.
What’s more, around one in eight people using self-assessment say they’ve been hit with fines in the past three years for submitting late.
- Find out more: Who should submit a tax return?
Are you filing for the first time? Make sure you leave yourself plenty of time to cover everything off.
Around one in five taxpayers said they found the process of filing their return hard, according to the Which? survey – and it’s likely to be especially difficult if you’ve never done it before.
Of the people who say they’ll be filing a return for the first time this year, 38% say it’s because they’ve gone freelance, and 28% say they’ve made additional income that needs to be declared.
Another 10% are trying to claw back tax they’ve overpaid in the past.
- Find out more: Self-assessment tax
What could a late return cost you?
Though there’s still a week to go until the online self-assessment deadline, don’t be tempted to leave it until the last possible moment.
If you miss the midnight deadline by a minute, there’s an automatic £100 fine. If you let three months lapse before filing, your penalty will start rising by £10 a day, up to a maximum of a further £900.
Should you let your return slide by six months, there’s another £300 fine, or 5% of the tax you owe, whichever is higher. And if you’re among the worst offenders, who file a year late, you’ll pay another £300 or 5%, meaning an avoidable bill of at least £1,600.
- Find out more: Late tax returns and penalties
Make your tax return less taxing
When asked what could take the hassle out of filing their taxes, 32% of people said they’d welcome a checklist of the information, and 19% would like an example tax return to use as a guide.
Software to manage receipts and invoices was the preferred aid for 19%, while 13% said they’d seek the support of a professional.
You’ll be less likely to make a mistake if you follow our tips:
- Keep track of your paperwork throughout the year, including invoices and receipts
- Declare all your sources of income, including pension payments, savings interest, dividends and rental income
- Work out if you’ve made any capital gains (or have capital losses from previous years)
- Check your allowances and reliefs, including your Personal Allowance, Personal Savings Allowance, Dividend Allowance, and Married Couple’s Allowance
- Take advantage of your deductions and expenses – but make sure you’re within the limits set by HMRC
- Double-check your paperwork (and seek advice from HMRC or an accountant if you’re unsure)
You can find out more at our guide to self-assessment tax.
Alternatively, Which? has developed its own online tax calculator to make completing your tax return simple. It’s jargon-free and uses personalised tips to help you work out the information you need. It will also submit your paperwork directly to HMRC for a small fee.
Find out how to use the tax calculator in our video below.