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.
‘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