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Completing a self-assessment is the bane of a lot of contractors‘ lives; on top of taking a lot of time, there are often many common mistakes made which can either result in having to start again or receiving a fine. Not all mistakes lead to a penalty but they can lead to more tax being paid than necessary.

Made a Mistake on Your Self-Assessment Tax Return? What You Can Do:

Making a mistake on your self-assessment tax return form is an easy thing to do. When you spot a mistake after you have filed it, there are things you can do. If you submitted the form online in the last 12 months you can fill out an online amendment form. When logged in to your HMRC online account you can find your submitted self assessment tax return form. When viewing this form you will see an option to amend the form. Upon selecting this option, you will see a list of sections and elements of the form available for amendment. You will need to select the appropriate section and then fill out the revised details and re-submit. If you filled out your return on paper, you have 12 months following the October submission (as paper returns have an earlier deadline), to re-download the form and fill it out correctly to send back to HMRC. If you have missed the 12 month window, you will need to write to HMRC explaining your circumstances and the mistake. The change to your form will either result in you needing to pay more tax or receiving a refund. You must make sure to carry out either action as soon as possible. You will have a four year window to file for and receive the refund starting from the end of the tax year it applies to.

HMRC Penalties for Incorrect Returns

HMRC can give penalties for incorrect returns. The fine process uses a ‘behaviour based’ system which range from 0 to 100% when assessing a penalty for incorrect returns. A reasonable care penalty of 0% will be applied when the taxpayer discovers a mistake and discloses this to HMRC, then 100% penalties apply when there is a deliberate false return, facts are concealed and the taxpayer only accepts the position following a challenge by HMRC.

Steering clear of mistakes and avoid HMRC penalties for incorrect returns is essential when you are submitting your returns. Read through our advice below to prepare yourself for your next self-assessment and avoid those pesky errors!

Remember to Pay

This has to be the first thing we talk about, even though it’s the last thing you need to do. More individuals than you may expect complete their self-assessment” and then do nothing. It’s easy to assume that everything’s done now, but you do actually have to arrange the payment to HMRC yourself – whether it’s by direct debit or cheque. Be sure to finish this step to avoid any late fees or criticism from HMRC.

Keep a Record of Everything

This will make your life so much easier when it comes to self-assessment time, but is something so few contractors, freelancers and business owners do right. Keep a clear and easy to follow record of every piece of expenditure, every wage or dividend – anything to do with money! When it comes to filling in your self-assessment, you’ll find having everything to hand (preferably on a spreadsheet) speeds the process up and prevents any panicked searches for bank statements.

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Check the Figures

Check your record keeping and ensure that the figures entered onto the tax return match the actual amounts in your records. Any errors could result in you under or over declaring your income and taxes.

You will be responsible for ensuring that the correct amounts are declared to HMRC.

Read the Questions

Just like an exam back at school, be sure to read the questions and make sure you know exactly what the form requires of you. If you provide the wrong information, it could mean you have to re-do the whole thing or you could be declaring the wrong amount of tax/profit etc. Always be sure before you do anything.

Amend Your Self Assessment

If you realised you have made a mistake on your tax return, it won’t be too late to do something about it. You can go back and amend your self-assessment should you need to. You have 12 months after the usual 31st January tax return deadline to amend a self-assessment. You amend your self-assessment via the process that you submitted it, so online if it was submitted in this way and on paper if you submitted it on paper.

Use an Accountant

Of course the best way to avoid all of the headaches involved with self-assessment forms is to simply hire a self assessment tax return accountant. They have the professional knowledge to understand what is required and have often done it hundreds of times before.  Still remember to keep a record of everything though – it’ll make their life a lot easier! If you have already started, or even submitted your self-assessment but feel like you need assistance with it, it may not be too late to get help either. You, or an accountant can amend a self assessment so long as its before the deadline, which you can find on the Government’s website.

If you want to complete your next self-assessment on time and correctly, consider asking an accountant for help. Contact Gorilla Accounting for expert advice and professional assistance, and avoid any mistakes!