Get Your Self-Assessment 2025 Right: Key Mistakes to Avoid When Filing Your Tax Return
HMRC uses Self-Assessment to receive income tax payments from individuals and businesses. The system helps HMRC identify unidentified income sources to ensure everyone pays proper taxes when they earn business profits or freelance income. It includes all types of income, from jobs to rentals and investments.
During each fiscal year from April 6 until April 5, you must give HMRC details about how you earned your money and what you made. If you operate your own business or work as self-employed, you need to file your Self-Assessment return with your tax payment before midnight on January 31.
Deadline for Your Self-Assessment Tax Return 2025
For the 2023-2024 tax year, the deadline for submitting the Self-Assessment tax return is 31 January 2025 (by midnight). This is also the date by which you must pay any tax due for the 2023-2024 tax year, along with your first payment on account for the 2024-2025 tax year (if applicable). If you’re filing on paper, the deadline is 31 October 2024.
It is important to file your self-assessment on time, but you must also avoid making mistakes that will cause you trouble later. Let's dive deeper and understand which mistakes we can avoid while filing our self-assessment tax return this year:
Common Mistakes to Avoid When Filing Your Self-Assessment Tax Return
Here, we have mentioned the list of mistakes we can avoid while filing the tax return:
1. Wrong UTR or NI numbers
One of the most common errors on tax returns is entering the wrong Unique Taxpayer Reference (UTR) or National Insurance (NI) number. In some instances, these are altogether excluded.
HMRC issues a UTR when you register for self-assessment or incorporate a limited company. If you do not supply this 10-digit number when completing your tax return, HMRC will be unable to identify you. It is preferable that you utilise your personal UTR for your self-assessment return rather than any corporation tax UTRs you may have.
where you have lost or forgotten your UTR, you can search it in your Personal Tax Account, the HMRC app, previous tax returns (where applicable), or other HMRC documents.
2. Missing the Tax Deadline
Failing to submit your tax return by the deadline represents the number one error you must avoid. During the 2023-2024 tax year, online filers must submit their returns by 31 January 2025 and make payment of outstanding tax by that date. The tax filing due date draws earlier for paper submissions with a final date of October 31st 2024.
Missing this deadline can result in automatic fines from HMRC:
* HMRC will charge you a £100 fee for filing after the deadline even when you owe no tax.
* Further penalties if your return is late by more than three months.
You need to monitor your deadline tightly. Instead of procrastinating until the last minute, you should submit your tax return ahead of time.
3. Failure to Declare All Income Sources
Don't just look at your earnings from work or self-employment. Taxable income sources include rental income, profit (capital gains) from the sale of assets like a second house or cherished goods, income from dividend-paying investments in business stock, and even gratuities or commissions. You have to declare all sources of income, like:
* Salaries
* Freelance or self-employed income
* Rental income
* Interest or dividends from investments
* Capital gains from selling assets or property
You must also record any self-employed income support programme (SEISS) payments received after April 6, 2021, as well as 'donations' from internet sites like as Patreon, Twitch, and Kofi.
You may be taxed if you get child benefit and earn £50,000 or more. The high-income child benefit charge is a tax repayment equal to 1% of the benefit.
4. Overlooking Tax Reliefs & Allowances
Many people do not take advantage of tax benefits available to them because they don't recognise these options. These include:
* Marriage Allowance: When two married people have different incomes less than their personal allowance they can send tax breaks to their partner.
* Pension Contributions: The money you contribute to your pension plan lowers the income subject to taxation.
Charitable Donations: Donations to approved charity organisations help reduce your reported income and lead to lower taxes.
If you do not take advantage of your tax breaks, you will pay more tax than you should.
5. Making a Claim for Non-allowable Charges
It's tempting to claim as many deductions as possible to reduce your tax bill but proceed with caution. Some expenses, such as vacations or a new television, will not be eligible for reimbursement. However, there are a few murky areas to be wary of.
Many business owners make the mistake of assuming that certain expenses are allowable for everyone. Some expenses will apply to your firm, while others may not.
Fuel claims are a typical example. Businesses that need to travel regularly might claim fuel and travel expenditures. A home-based business that doesn't involve travel is unlikely to qualify for tax benefits.
6. Basic Mistakes in Your Tax Calculation
Even the smallest mistakes in your calculations can result in incorrect tax returns. These errors may be due to:
* Miscalculating income or expenses
* Erroneously entering numbers
* Failure to include income or deductions
If you feel you are incorrect, it's best to seek a professional's assessment of your return.
7. Nondisclosure of Pension Contributions
If you have contributed to a pension during the tax year, you should include that information on your return while filing your tax return. There will be a space where you can fill out your pension contributions. More information about tax on private pension contributions can be found on the HMRC's website.
Correcting this is crucial since claiming to have contributed too little may result in disallowing tax relief. If you overestimate your donations, HMRC may charge you interest on the underpayment.
8. Underestimating Your Tax Bill
Taxpayers often make mistakes by thinking they owe less tax. You need to pay National Insurance and income taxes together when you run your own business. Your tax bill needs to include payments on account when the amount exceeds specific limits. Failure to pay your full tax bill on time can lead to:
* Interest charges
* Penalties for late payments
* Possible investigation by HMRC
Budgeting for your tax payment needs to happen ahead of time. Our experts at Aone will help you prepare the correct tax amount for your business so you avoid last-minute surprises.
Self-Assessment Filing Checklist
Here’s a quick checklist to ensure that your Self-Assessment tax return 2025 is filed accurately:
File Smarter, Not Harder—Trust Aone Outsourcing Solutions for Stress-Free Tax Filing!
Tax return filing becomes easy and simple with Self-Assessment. Your tax return will be accurate and timely if you avoid these errors. Aone Outsourcing Solutions helps you through the necessary tax return steps. Our team will keep your deadlines on track and help you find all tax deductions while protecting you from penalties so you can concentrate on business development or personal living.
Our service prevents you from paying extra through errors because we handle your tax preparation the first time for success.
