04 Oct The Pitfalls of completing a tax return
The Association of Chartered Certified Accountants (ACCA) have warned of the pitfalls of individuals completing their self-assessment tax returns themselves:-
Hundreds of thousands of extra people are expected to complete a self-assessment tax return for the first time by 31 October, including people who have won compensation for mis-sold payment protection insurance (PPI) who are at particular risk of making errors on their returns, according to ACCA.
Chas Roy-Chowdhury, ACCA head of taxation, said:
While the PPI compensation itself is not taxed, any interest element awarded on that sum is taxable. Failure to declare that in the self-assessment form could lead to a knock at the door from HMRC. It’s not obvious at all in completing the necessary forms.
The ACCA says changes to the child benefit system and a rise in the number of self-employed are behind a predicted substantial rise in the numbers of individuals who self-assess. High earners with incomes over £50,000 who continue to claim child benefit but do not complete a self-assessment form could be liable, not only to repay part of all of the benefit claimed by way of a tax charge on the highest earner of the couple, but also interest and penalties on the tax unpaid.
Roy-Chowdhury said:
‘It’s not just completing the form that’s tough, its knowing what can and can’t go in that could trip you up. Self-assessment was supposed to be a DIY tax, but we are at a stage now where guidance from an ACCA finance professional may be a necessity to avoid the potential of being penalised for unpaid tax.’
If you require any assistance completing your self-assessment tax return, please don’t hesitate to contact us at Hughes Accountancy. Fixed priced quotations are always agreed up front.
Source: CCH online 1st October 13