{"id":2341,"date":"2017-12-06T05:03:59","date_gmt":"2017-12-06T05:03:59","guid":{"rendered":"https:\/\/www.thetaxguys.co.uk\/?p=2341"},"modified":"2023-10-21T11:05:27","modified_gmt":"2023-10-21T10:05:27","slug":"desimt-dazniausiai-daromu-mokesciu-deklaravimo-klaidu-kurias-daro-smulkiojo-verslo-savininkai","status":"publish","type":"post","link":"https:\/\/www.thetaxguys.co.uk\/lt\/2017\/12\/06\/ten-common-tax-return-mistakes-made-small-business-owners\/","title":{"rendered":"De\u0161imt da\u017eniausiai darom\u0173 ma\u017e\u0173 \u012fmoni\u0173 savinink\u0173 mokes\u010di\u0173 deklaracij\u0173 klaid\u0173"},"content":{"rendered":"

To assist self-employed and freelance workers getting ready to file self-assessment tax returns this month, Jonathan Amponsah, co-founder of tax return app Easy Tax Returns, reveals ten common tax return mistakes to help small business owners avoid an unwanted visit from HMRC.<\/strong><\/p>\n

January 31 is looming \u2013 and if you haven\u2019t already filed your self-assessment tax return, then it\u2019s time to get started. Late filing can result in hefty fines.<\/p>\n

[show_more more=”MORE” less=”LESS”]<\/p>\n

But it\u2019s not just being late that can lead to a nasty letter from HMRC or a request for additional money to cover interest and a fine. In my experience, there are ten classic mistakes that people make on their tax return.<\/p>\n

These mistakes, however innocent, can lead to additional enquiries and even investigations by HMRC. At the very least they may mean that you pay too much tax or a refund is delayed.<\/p>\n

1.     Forgetting to include all sources of income<\/h4>\n

In the rush for January, it\u2019s easy to forget income sources, such as interest being received in the year.<\/p>\n

However, HMRC knows if you have an interest earning account or perhaps an offshore bank account. So, they will be asking: \u201cIs this where you have filtered away undeclared profits?\u201d.<\/p>\n

This will trigger an investigation, which can be time consuming and costly. <\/strong><\/p>\n

2.     Not using the white space to explain unusual variations<\/h4>\n

If you know there is something unusual, explain it.<\/p>\n

HMRC is then far less likely to start an enquiry. It is crucial that you or your accountant do this, although often it doesn\u2019t seem to happen especially if your accountant is snowed under with lots of last minute returns to prepare.<\/p>\n

For instance, if your net profit seems too low to support someone above the poverty line, be prepared for give a plausible explanation.<\/p>\n

However, there\u2019s no need to go overboard or be over generous in the information you give. Keep it straight, honest and simple.<\/p>\n

Also, make sure you do a reasonableness check. If your final tax is a lot more or a lot less than you expected, then this is a sign that something may have been entered incorrectly. Unless you\u2019re able to put a finger on the reason why, you need to go back and double check.<\/p>\n

3.     Entering the same expenses in different boxes each year<\/h4>\n

In their haste to get the return filed, many taxpayers and sometimes even their accountants do misclassify the expenses on the return.<\/p>\n

For example, a driving instructor putting their fuel cost in the cost of sales figure one year and then in motor expenses the next, will produce large variations that the computer will want further explanations for.<\/p>\n

4.     Entering \u201cyes\u201d between questions one to nine on page two of the tax return but not forwarding the supplementary pages to HMRC<\/h4>\n

This is a common mistake with manual, paper filing. If you are filing online then this will be picked up by the checks the programme carries out.<\/p>\n

Also, don\u2019t simply say \u201cas per accounts\u201d or \u201cmore information to follow\u201d. You have to send the relevant information with your return. You might think the taxman already knows it and can look it up, but that\u2019s not the way the tax calculation programme works. You simply have to supply the info in the boxes as required.<\/p>\n

5.     Claiming for expenses that cannot be claimed<\/h4>\n

The rules on what expenses can\/cannot be claimed is not as straight forward as you may think. You should proceed with care or appoint a good accountant or tax adviser.<\/p>\n

For instance, you might assume that an actor who rented accommodation in Scotland during a film shoot for his business could claim the cost of the accommodation against his income, right? Wrong. HMRC denied the expenses and won the Court case. It was decided that the expenses did not meet the so called \u201cwholly and exclusively for the purpose trade\u201d test.<\/p>\n

In addition there are certain areas to be aware of. These \u201chot spot\u201d areas tend to attract more attention than others. HMRC knows that enquiries into the following expenditure areas are likely to produce some interesting results:<\/p>\n