What to do when errors occur
What to do if you've made a mistake - and the common errors to avoid.
Mistake on your tax return? HMRC are increasingly likely to say you did it on purpose. Careless error, or deliberate inaccuracy? The taxman appears more likely to conclude the latter – and penalise taxpayers accordingly.
Nearly two million of us will make an error on the most important tax form of the year - and it could end up costing you hundreds of pounds. Nearly one in five people who have completed a self assessment tax return previously, believe they may have made a mistake that has lost them money, a recent survey has discovered.
More than ten million tax returns are submitted to HM Revenue and Customs (HMRC) each year, but 19% of those who have filled a self-assessment form in the past two years think they may have lost out financially because they had made a mistake or not understood the document.
The areas in which people struggle the most with surround tax regulations around dividend income, property income, pension contributions or rates and allowances for savings income, consumer watchdog Which? found recently.
Making a mistake on your tax return could end up costing money; whether it’s an additional tax bill or a penalty for a miscalculation, HMRC’s system of penalties could be as much as 70% of the tax owed.
Late excuses won't get you off the hook neither. HMRC has previously said it will treat those with genuine excuses for late returns leniently and focus its penalties on those who persistently fail to complete their tax returns and deliberate tax-evaders. Accountants have suspected such a "hardening" of attitudes at HMRC for some time.
So leaving your tax return to the last minute can add pressure which in turn leads to mistakes.
How do you update your tax return?
This depends entirely on how you filed it. If you did so online, follow these steps to make an amendment:
Log in to your HMRC online account.
From ‘Your tax account’, choose ’Self Assessment account’ (if you don’t see this, skip this step).
Choose ‘More Self Assessment details’.
Choose ‘At a glance’ from the left-hand menu.
Choose ‘Tax return options’.
Choose the tax year for the return you want to amend.
Go into the tax return, make the corrections and file it again.
Or better still contact 1st Cloud Accountants today!
Our advice is to spend some time going through your completed accounts and tax returns before we submit them. If you have any concerns, then raise them with us early. That could help you to avoid the nightmare of becoming embroiled in an HMRC investigation, which could result in a large tax bill and a fine – as well as plenty of sleepless nights – for you.