Are you in a hurry to file your tax return? Avoid making these typical blunders.

 When the time for filing tax returns approaches, it's tempting to feel compelled to complete yours as quickly as possible. Here are some helpful hints to assist you avoid the most common mistakes people make while filing their self-assessment returns before the deadline each year.


The first blunder is failing to record all interest earned on all bank accounts.

The interest you received on all of your bank accounts for the tax year in question must be included in the main portion of your tax return. The only exception to this would be a bank account that pays tax-free interest, such as an ISA.

Include the following information when declaring interest on bank accounts:

  • Interest on a business checking account
  • Your part of interest earned on any accounts you shared with someone else
  • On personal bank and building society accounts, interest is paid.

In FreeAgent, you can declare interest earned on bank accounts.

In your FreeAgent account, you can include both taxed and untaxed interest to the ‘Main Return' page of your Self Assessment tax return.

Free Agent's accounting software calculates your Self Assessment tax bill based on the invoices, costs, and other accounting data you provide during the year if you're a sole trader or a limited company director.

This information is used by FreeAgent to automatically complete some of the information in the Self-Assessment forms. FreeAgent can fill out up to 90% of the Self-Employment form for you if you're a sole trader. The software has built-in assistance to assist you in understanding the remaining information necessary in each form.

You can upload your full Self Assessment tax return straight to HMRC from FreeAgent once you've added the extra facts, such as interest collected on bank accounts.

Mistake number two is failing to report unreceived company income.

Unless you prepare your accounts on a cash basis, you may be surprised to learn that you must include all income from the previous financial year in your tax return, including unvoiced and unpaid income.

If your accounting year end coincides with your tax year end, for example, you'll need to include in your 2020/21 tax return any money earned but not yet paid for work done by 5 April 2021.

Mistake number three is failing to keep track of unpaid expenses.

Just as you must disclose all income on your tax return, you must likewise record all costs from the previous accounting year, even if they were unpaid by the business at the end of the year (unless you're preparing your accounts on the cash basis). If the conclusion of your accounting year coincides with the end of your tax year, you'll need to include any unpaid charges incurred by April 5, 2021 on your 2020/21 tax return.

You'll need to account for two types of unpaid expenses:

  • costs that will be paid by the company after the conclusion of the fiscal year (e.g. an office telephone bill)
  • Cash will never leave your company's bank account for these expenses (e.g. business use of home expenses and the cost of mileage for business travel)

Mistake #4: forgetting to include your job's pay, benefits, and reimbursed expenses.

In April or May, you will receive a form P60 from your employer if you have a salaried employment in addition to running your own business. This will show you how much money you made and how much tax was taken out of it. This information must be recorded on the Employment pages of your tax return.

If your employer provides non-cash benefits (such as medical insurance) or reimburses you for expenses, you should have received a form P11D detailing these facts. Make a note of this information on your tax return's Employment pages, along with your pay and tax deductions. If the expenses you were reimbursed for were entirely for the purpose of doing your job, put them in boxes 17-20 so you don't have to pay extra tax on the money your company gave you back.

Mistake 5: failing to report underpaid or overpaid tax from a PAYE Notice of Coding.

If you're employed and underpay or overpay tax as a result of a change in your PAYE tax code, you'll get a letter called a Notice of Coding that specifies the underpayment or overpayment. This information must be included in the Tax Adjustments section of your tax return for the applicable tax year.

It's worth double-checking because failing to include details of underpaid or overpaid tax from a PAYE Notice of Coding in your tax return might lead to complications later. HMRC may try to collect any underpayment from you twice: once on your tax return and again on your tax code.

Check out our Self Assessment Checklist and video on how to file your tax return with FreeAgent if you need even more last-minute help. Talk to your accountant or call HMRC's Self Assessment Helpline if you have any questions about how to fill out your tax return.

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