Taxpayers who are completing the self-assessment tax return online during December, will be pointed in the direction of the new personal tax accounts, which have been launched by HM Revenue & Customs (HMRC).
The accounts are expected to work in a similar way to an online bank account, with all information in one place, giving taxpayers a “clear and joined-up view” of their tax details and the tax they are paying. Currently, information for taxpayers is gained from a range of sources, which means that they have to repeatedly provide information that’s already held. The new personal accounts will draw all the information together in one place.
According to data provided by HMRC, the new digital accounts are already in use by two million businesses. It is expected that by April 2016, the five million small companies in the UK will be using their own online account. This timeline also applies to individual taxpayers in the UK. For small businesses, this may improve efficiency for those who outsource accounting.
By 2020, everyone is expected to have access to a personal tax account, which will remove the requirement for a self-assessment tax return. There will also be less chance of making mistakes, which can cause many problems for those who complete a tax return.
Most common mistakes when completing a tax return
As the January deadline approaches, many people are left worrying about completing their tax return, asking themselves questions like ‘Have I got all the information I need?’ and ‘Do I have the correct self-assessment pages?’ Christmas is one of the most popular times for people to complete their tax returns, with record numbers filing on Christmas Day and New Year’s Eve. It is easy to make a mistake when completing a return, and here are some of the most common ones:
• Your unique taxpayer reference number identifies your personal records, and misquoting the reference number is one of the most common errors. This can cause delays in finding your records.
• Forgetting to date and sign the form means that it will be returned to you if it is a paper copy, leading to delays and possibly missing the deadline.
• Entering the wrong figures is an easy mistake to make, but can lead to you paying the wrong amount of tax, and a possible penalty.
To avoid making errors with your tax return, why not contact us for an informal chat before the January deadline?