What Are Simple Tax Mistakes Costing You?
Nobody wants to pay more tax than they need to. Yet every year, thousands of UK taxpayers make basic errors that lead to just that. Tax returns might seem scary, but most problems come from small mistakes that are easy to fix once you know what to look for.
Let's look at the common tax slip-ups that could be draining your bank account and how to stop them.
What Exactly Counts as a "Simple Tax Mistake"?
Simple tax mistakes are small errors on your tax return that can have big consequences. They're the kind of slip-ups that happen when you're rushing or unsure about what to include.
These aren't complicated tax avoidance schemes just everyday oversights like forgetting to report some income or missing a deadline.
HMRC spots these errors during routine checks, which might trigger questions about your finances that could have been avoided. These mistakes often prevent you from claiming money that's rightfully yours, like tax reliefs or refunds you're entitled to.
The good news? Most simple tax mistakes are completely preventable with a bit of knowledge and care.
Why Are Tax Deadlines So Important?
Missing the 31 January Self Assessment deadline starts with a £100 fine even if you're only one day late. The penalties get worse over time. After three months, you'll pay £10 daily charges (up to £900), with further increases at the six and twelve-month marks.
Many people don't realise that filing deadlines and payment deadlines are different things. You need to watch both. Interest charges add up quickly on late payments, starting from the day the tax was due.
Setting a simple reminder on your phone a month before the deadline could save you hundreds of pounds in penalties.
Which Tax Reliefs Are You Missing Out On?
Many people pay too much tax simply because they don't claim the reliefs they're entitled to. Working from home? You might be able to claim tax relief on part of your household bills even if you only work from home part-time.
The Marriage Allowance lets you transfer £1,260 of your Personal Allowance to your spouse or civil partner, potentially saving up to £252 a year. Pension contributions get tax relief automatically, but higher-rate taxpayers often forget to claim the extra relief they're entitled to.
Don't forget Gift Aid when donating to charity. It increases the value of your donation and could reduce your tax bill if you're a higher-rate taxpayer.
What Income Are You Forgetting to Report?
That spare room you occasionally rent out? HMRC needs to know about that income. Many people forget to include bank interest on their tax return, even though most banks report this information directly to HMRC.
Selling shares at a profit? That's a capital gain that might need to go on your tax return, even if you're below the tax-free allowance. Side hustles count too whether it's selling crafts online or doing occasional freelance work.
Foreign income is often overlooked, but UK residents usually need to report worldwide earnings.
How Can Better Record-Keeping Save You Tax Headaches?
Good records make filing your tax return much easier and help you claim everything you're entitled to. You don't need fancy systems. A simple folder (physical or digital) for receipts, invoices and statements works well for most people.
HMRC can ask to see records going back at least six years, so don't be too quick to delete or throw things away. Tracking expenses throughout the year is much easier than trying to remember everything in January.
If HMRC ever questions your return, good records are your best defence. I learned this the hard way when I misplaced receipts for business travel and couldn't claim nearly £300 in expenses a mistake I've never repeated!
When Should You Get Professional Tax Help?
If filling in your tax return makes you break out in a cold sweat, it might be time to get help. Professional advice often pays for itself through the tax savings and peace of mind it provides.
Look for advisors with proper qualifications like membership of the Chartered Institute of Taxation or Association of Taxation Technicians. Before hiring someone, ask about their experience with situations like yours and how they charge for their services.
As your finances get more complex perhaps with property investments or self-employment professional guidance becomes more valuable.
How Can You Avoid These Mistakes Next Time?
Start by giving yourself plenty of time. Last-minute tax returns are where most mistakes happen. Double-check all figures before submitting. A simple typo could lead to paying too much (or too little) tax.
Keep learning about tax. The rules change every year, and staying informed helps you spot opportunities to save. Use digital tools to make tax management easier. They can help you track income and expenses throughout the year.
Pie is the UK's first personal tax app designed specifically for working individuals. Unlike other solutions, it combines bookkeeping, real-time tax calculations, simplified tax returns, and expert advice all in one place.
Final Words
Simple tax mistakes can happen to anyone, but with a bit of care, they don't have to happen to you. By understanding what to look out for and keeping better records, you can file with confidence and keep more of your hard-earned money.
Remember that getting your tax right isn't just about avoiding penalties it's about making sure you don't pay a penny more than you need to. Why not start getting your tax affairs in order today? Your future self (and bank balance) will thank you.
