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News : Self-assessment filers warned of common mistakes

HM Revenue & Customís (HMRCís) self-assessment tax deadline of January 31st is quickly approaching, with many limited company contractors trying to get their financial data in order so they can submit details over the next few weeks. For those who want to avoid fines and penalties, there are several common mistakes to avoid.

One of the most common mistakes is leaving data out such as interest that might have been gained from bank accounts. Though interest from Isas doesnít have to be declared, any interest from investments and savings accounts needs to be carefully filled in, allowing HMRC to clearly see if extra income has been received.

Taking care of figures is also vital, and limited company contractors have to ensure that theyíre not getting net profit mixed up with gross income. Tax forms will require net amounts of income to be declared, but many account statements might show gross interest and tax, meaning that freelancers need to be careful knowing which number is which.

Another area that is not realised, especially by first time submitters, is that all due tax has to be paid by the 31st January. Those submitting their tax forms might think that getting their self-assessment in by the end of January is sufficient, only to discover that tax is also due by this date. With bank transfers or credit card payments often taking a few days to go through, itís vital that forms are submitted ahead of the deadline so that penalties arenít incurred because of tax being paid too late.