The top 6 most common mistakes made on Self Assessment Tax Returns

As a Limited Company contractor your Self Assessment Tax Return (SATR) is due 31 January 2017, so right now it’s probably sitting on your ‘to-do’ list but hasn’t made its way to the top yet.

Whilst we know you’ll want to get it over and done with as soon as possible, it’s very easy to make simple mistakes which can lead to annoying fines from HMRC. So in this blog, Laura Hepworth Senior Client Manager at Intouch Accounting, outlines the top 6 most common mistakes made on your SATR, to ensure you don’t make them.

1. Inaccurate figures

If you’re submitting your SATR by yourself, always ensure you double check all figures (most importantly your salary, dividend and ‘other income’ data). Even if your specialist accountant is filing your SATR for you, it’s still your responsibility to check all information is correct.

2. Missing deadlines

Don’t forget to hit the ‘send’ button once you’ve completed and checked your return. It sounds like a simple step, but many people forget to do it! The Government’s online form allows you to save it and come back to it whenever you wish, so you won’t lose any information, but you must remember to actually submit it no later than 31 January 2017.

3. Not declaring all of your income

You must declare all of your income on your SATR, including any relevant income or capital gains. Should you miss any of this information out, you could face penalties, especially if it is obvious that you have deliberately under-represented your income.

Your SATR must display the following types of income:

1. Any dividend income

2. Salaries from all types of employment throughout the year

3. Any pension income

4. Any property letting income

5. Any Government benefits

6. Interest on savings

7. Employee share schemes

8. Any Capital Gains

9. Any foreign income (which must show proof of tax paid overseas if you have already done so)

ISAs, National Savings, Premium Bonds and prize winnings do not need to be declared.

4. Incorrect Unique Taxpayer Reference (UTR) or National Insurance number

Your SATR could be invalidated if you provide the incorrect UTR or NI number. Your UTR will be on previous correspondence with HMRC if you have previously submitted a SATR. Failing that, you or your accountant can register for Self Assessment, whereby HMRC will send you your UTR.

Your NI number will have been given to you when you started working, and will be printed on old pay slips or tax documents.

5. Missing pages

If you receive additional income that is not part of your main tax return, you will often be required to send / submit supplementary pages.

Additional income would include:
- Any life insurance gains
- Interest earnt from gilt-edged and other UK securities, heavily discounted securities, or accrued income profits
- Other tax reliefs (such as any investments in Venture Capital Trust schemes, or EIS)
- Any compensation payments from previous employers, share schemes or employment lump sums
- Any business income receipts taxed as income from a previous tax year
- Non-qualifying distributions and loans written off or stock dividends

6. Poor record keeping

Be it a shoebox under your bed or a drawer in your home office, you must keep all relevant business paperwork in a safe place so that it’s all ready for when you complete your SATR.

To give you an idea of the types of documents a typical contractor will need, see below:

- Records of student loan payments made, pension scheme payments made, payments into an employee share scheme
- Your P60, P11D and P45, plus any salary or benefit-related HMRC paperwork
- Income details of any rental properties and any allowable expenses
- Received child benefit throughout the year (if any)
- Bank statements with any paid interest (plus any basic rate tax that has already been deducted)
- Any charitable gifts you’ve made throughout the tax year (in order to claim tax relief)
- Dividend tax vouchers (from your own personal company and any others)

To summarise - ensure you’re bulletproof
HMRC have a very keen eye for mistakes, so it’s important to ensure you’ve done everything on your part to make sure all information is correct.

Don’t get caught in their firing line, ensure you enlist the services of an expert accountancy firm that specialises in the needs of Limited Company contractors, who will be able to help you get it right first time.