Self-assessment: 5 tips to avoid common pitfalls

With less than two months to go until the self-assessment deadline, we know that many of you will have started gathering the necessary paperwork for your submissions. For those who are yet to begin, let this be your reminder! We’d always advise getting on top of your filing duties sooner rather than later, especially seeing as the Christmas period is likely to take a good chunk out of the number of working days between now and the submission deadline. Not to mention you could be looking at some nasty penalties if you fail to meet the deadline, especially now that a late payment interest rate increase has been announced. 

To help you prepare for filing your self-assessment tax return (SATR), we’ve created this blog that lists all the key dates as well as the most common filing pitfalls. That way, you can steer well clear of making these mistakes yourself.  

1. Familiarise yourself with the process 

Deciding to become self-employed is a big enough challenge in itself, without the added responsibility of now having to do your own taxes too. It’s always the things we don’t understand that are the most daunting. That’s why we recommend familiarising yourself as best you can with the filing process, whether that be through some online research or by speaking to friends and colleagues who have done it themselves. HMRC has created a useful self-assessment tax return filing overview which may be of help too.   

A lack of knowledge can lead to filing mistakes and mishaps, the result of which could be penalties for inaccuracies and the last thing anyone need is to be dealt with a fine. That’s why having a financial expert like Caroola on hand is the perfect solution as you’ll have someone with you every step of the way. We’ve worked with countless self-employed people and limited company owners like yourself in our time, from start-ups and newbies to seasoned professionals, so we have a wealth of experience in tackling tax head-on! If you haven’t got the brainpower or the time to familiarise yourself with what needs to be done, you can pass that burden onto us and we’ll gladly take care of it. What’s more, we’ll do it efficiently and compliantly.

2. Stay organised throughout the year 

This is one of those times where you have to be strict with present you in order to make life easier for future you. It may seem like a headache to be diligent with logging all of your expenses as and when they happen, keeping hold of all receipts for business transactions and storing them neatly, maintaining accurate and up-to-date financial records, etc. The truth is, you should be doing all of the above anyways for best practice, but it’s especially useful if you want to sort your self-assessment out as quickly as possible. Trust us when we say you’ll thank yourself in the long run. 

An important thing to note here is that you will need to report all taxable income on your self-assessment. That could include rental income, interest on savings, investments, pension, and more, not just wages and company profits. As such, keeping your documents and receipts organised is crucial so that nothing slips through the cracks and ends up not being reported. You may even find that filing these in chronological order, or having separate files for separate incomes, is the way to go. 

3. Start earlier rather than later 

Just because the deadline for filing online self-assessments and submitting tax payments is January 31^st, that doesn’t mean you have to leave your submission until January 30^th. In fact, we strongly advise you to steer clear of this and do the opposite! People sometimes fall into the trap of continuously putting off doing their tax return and then suddenly panicking come the new year. In their rush to get it filled in and submitted on time, they’re much more prone to making mistakes. If they struggle to locate all the necessary paperwork on time – financial documents, receipts, business expenses – they could end up missing the deadline entirely. 

Some people decide to file shortly after the new fiscal year begins on April 6th. This may seem over the top, but it’s a great way of staying ahead of the filing deadline and minimising the risk of filing at the last minute. Life as a limited company director or self-employed professional will always be fraught with challenges and time struggles, so putting off your filing duties to another day could very easily become a recurring pattern that ends in late submission and fines. We recommend you always start the filing process early if you can.   

4. Use all tax relief available to you 

A recurring mistake we often see people make, especially those who are new company owners and first-time filers, is not claiming for tax relief that applies to them. While many people are aware that there’s relief to be claimed, they don’t necessarily take the time to familiarise themselves with the different types available. This means that they’re unsure of which relief does and does not apply to them and, rather than make a mistake and be penalised for it, they end up not claiming any relief. 

Failing to make use of the various tax deductions out there is a common pitfall that can be easily avoided. From pre-trading expenses (covers some costs of business set-up) to Gift Aid (tax relief on charitable donations made by individuals), there is a variety of relief out there. You may find it useful to read HMRC’s page on reliefs and allowance. Setting aside some time for research should help you feel more confident in your understanding. Even better, talking through your options with a tax expert will ensure you don’t make any unnecessary errors, such as claiming an expense that isn’t eligible, as they will be able to advise you based on your individual circumstances.  

Our team at Caroola are specialists in this area, helping you optimise your taxes legally so that you retain a larger take-home pay. Why not give us a ring and we can chat you through your options?  

5. Leave yourself enough time to check  

Rushing a self-assessment tax return is guaranteed to result in human errors. It’s a good idea to complete your tax return, give yourself some time away, then come back to check it with fresh eyes. That way, you have more of a chance of spotting potential mistakes. There is also software you can use to help you with your online submission which could be a good idea for catching inaccuracies early. Better still, using an accountant is an excellent way to ensure your SATR is spot-on.   

eive. This outcome depends on your situation and the state benefits you claim or intend to claim.  

Caroola & Self-assessments 

Here at Caroola, our accountants are specialised tax experts who are well-versed in ever-changing and complex tax laws and regulations. From identifying ways to leverage your taxes compliantly to meticulous levels of attention to detail when it comes to spotting discrepancies, our team will reduce your risk of filing penalties.  

Did you know that self-assessment filing is one of our core services offered in every accounting package? Alternatively, we offer a stand-alone SATR service too, so you can decide what’s best for you and your company.  

Contact our team today and we can answer any of your outstanding questions. Let’s get filing before the deadline!