The most common tax filing mistakes that can cost you dearly

0
7

Just over a week to go until the declaration TBEN on January 31. But nearly five million have yet to apply, and rushing to meet the TBEN puts them at risk of missing out on lucrative tax breaks.

Consumer group Which? found that many who are due to file a tax return this year are in the dark about the expenses and tax credits they can claim.

In a survey of 881 self-assessment submitters, Which? found that 13 percent mistakenly believed many types of work equipment could not be declared as expenses, while another 13 percent said they didn’t know.

HM Revenue & Customs lets the self-employed claim for a wide range of equipment, including office supplies, business laptops and computer software, potentially saving employees hundreds of pounds.

ALSO READ  Read the investigation into Nadhim Zahawi's tax affairs in full

That? also found that the self-employed are at risk of missing out on work-from-home costs. Freelancers and entrepreneurs who work from home can declare part of the costs for heating, electricity and internet.

The reduction is based on the number of business premises and the proportion of time that the premises are used for work. For example, an employee can get £35.50 off a £500 electricity bill if they use 10 percent of their home as an office, five days a week.

There is a separate tax credit for those who were forced to work from home in the lockdown-hit tax year 2021-22. These workers can claim tax relief of up to £6 per week, which equates to £1.20 for basic rate taxpayers (£62.40 per annum) and £2.40 (£124.80 per annum) for basic rate taxpayers. higher rate.

ALSO READ  Nadhim Zahawi 'misled officials over David Cameron's Greensill messages'

Higher and higher rate taxpayers should also note that tax credits are available for retirement contributions and charitable donations made using Gift Aid.

It is worrying that 42 pc. didn’t think a tax return could be changed once it had been filed – suggesting that large numbers of people wouldn’t go back to HMRC to claim an expense allowance they were entitled to.

Using tax credits can reduce self-assessment bills by hundreds or even thousands of pounds, but it’s up to the taxpayer to find out what they can claim and tell HMRC.

If you realize you’ve made a mistake on your tax return, you can correct it through HMRC’s online portal up to one year after the filing TBEN. Those who have submitted paper returns must download and send a new return to HMRC with “amended” written on the corrected pages.

ALSO READ  Lisa Marie Presley 'rushed to hospital after cardiac arrest'

A third of respondents said they were concerned about whether they could pay their bill this year, so it’s vital that self-assessment submitters check what they can claim.

Danielle Richardson of what? said: “Our research shows the impact of the cost-of-living crisis, with one in three people filing a tax return saying they are worried about paying their tax bill this year.

“Before filing their returns, consumers should allow enough time to avoid hasty mistakes, and it’s worth checking if they’re eligible for any additional tax credits or allowances.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here