Cost of living latest: Two reasons behind big rise in house sales… – Sky News
There’s a week to go until the deadline for British tax returns.
If you’re filing for the first time, it can be a daunting task – and 31% of 881 people surveyed would agree they are worried about making a mistake.
This is understandable, of course , as submitting an inaccurate return to HMRC could land you with a hefty fine on top of your taxes.
Below, consumer experts Which? share common mistakes – and how to avoid them:
Leaving it too late to register with HMRC
Those filing a tax return for the first time will need to register with HMRC, ideally far before the deadline of 31 January. There was an official deadline – 5 October 2022 – but there isn’t a penalty if you miss it. The issue is, if you still haven’t registered, you might struggle to get set up before the deadline.
Not declaring all income sources
When filing a tax return, it is important to consider all the money you have earned in the previous year. This is not just employment or self-employment, but also rental income, capital gains and even tips or commission. You will also need to declare any “donations” you have earned from online platforms such as Patreon, Twitch and Kofi before the deadline.
Make sure to take advantage of tax-free allowances
Remember to take full advantage of all the allowances plus tax reliefs that apply to your personal situation – or you could end up paying too much.
For example , if you are declaring capital gains — through shares or investment property – you get an annual allowance before tax is payable. There are also business expenses, which you can deduct from your profits. This includes things like business trips, stationary and costs from running your business site.
Not preparing to future payments
You can always make sure you are ready for your tax bill by putting aside the money as you are paid – that way there are no surprises when it arrives. Taxpayers may also be asked to start paying tax in advance thorough the “payments on account” arrangement, after they have worked a full tax year.