300,000 Reasons to Double Check Your Self-Assessment
Self-employed workers are being urged to double check their self-assessment for accuracy after it was revealed that HMRC opened more than 300,000 tax return investigations last year.
It has also been revealed that one-third of self-assessors could be paying too much tax.
Just ahead of the January 31 deadline, it has been revealed that the tax authority opened 300,762 new tax investigations in 2019 and received £1.2bn in extra tax from investigations into self-assessment tax returns in 2018/19.
“We are getting very close to the self-assessment tax deadline now, but that’s no reason to submit a sloppy return,” said Jason Bradley of .
“Even if it is not deliberate, making a mistake on your tax return can attract HMRC’s attention and this can lead to a more in-depth investigation or a penalty,” he said.
A total of 477,000 tax returns were submitted after the deadline last year, leading to £47.7m of penalties being imposed.
If during the course of an investigation, HMRC decides that a mistake was made deliberately then they can share as much as 100% of the account of tax in question, whereas ‘failures to take reasonable care’ can attract penalties of 30%.
HMRC claims that its methods of data collection and analysis have become more advanced in the last few years.
In one recent case, the taxman caught an ‘unemployed’ Londoner living it up on luxury holidays after they scanned his social media profiles and discovered that he was evading tax on smuggled tobacco.
Jason Bradley said: “It is always worth double checking your tax return. Even if you haven’t made a mistake, HMRC investigations can be very stressful.
“Who knows, you may even discover that you’re about to pay too much tax.”
Consumer group Which? recently warned that a third of people will pay too much tax because of confusion around self-assessment expenses.
Survey evidence suggests that just one in four people who submit a self-assessment form claim expenses, meaning that many could be missing out on crucial savings.
One in 10 people surveyed don’t bother claiming as they feel their expenses are negligible, while half believe they do not have expenses they can claim for. But when they were presented with a list of potential claims, more than three in 10 said they didn’t know they could be claimed in a tax return.
Jason said: “Cloud accounting software packages can make your self-assessment faster and more accurate. FreeAgent is specifically designed for freelancers and other self-employed professionals. It makes it easy to track income and expenditure throughout the year.
“And when it comes to filling in your tax return, the software does most of the hard work for you.”
For more information about accounting software and support, speak to a member of the team today. Call: 0808 281 0303.