Top Tips for Getting Your Tax Return Right Shipleys Tax Advisors

IT’S THAT TIME of the year again and the dreaded 31 January self-assessment tax return deadline is fast approaching. Missing this critical date or filing an inaccurate return can lead to hefty penalties, investigations, and stress. HM Revenue & Customs (HMRC) has advanced tools to check your finances and identify undeclared income.

In today’s Shipleys Tax note, to help you meet the deadline and avoid taxing problems, here are some basic top tips to get your tax return right and a general insight into how HMRC might verify your information.

Top Tips for Getting Your Tax Return Right


1. File Your Tax Return on Time

This is the number one for a reason. Filing late is an automatic red flag for HMRC, and penalties start from £100, even if you owe no tax. The deadline for online submissions is 31 January 2025, so act now to avoid last-minute panic.


2. Declare All Sources of Income

A very obvious one. Failing to report all your income is one of the most common mistakes, and HMRC has several ways to detect it. Be sure to include:

  • Bank interest (onshore and offshore): Declare interest from savings accounts. Offshore institutions report account details under the Common Reporting Standard (CRS).
  • Rental income: Include income from properties rented privately or via platforms like Airbnb. HMRC can track property ownership and rental activity.
  • Self-employment income: Report all freelance or gig work earnings, including payments through platforms like PayPal, Etsy, or Fiverr.
  • Trading gains: Include profits from share trading, forex, or cryptocurrency transactions.

3. Avoid Common Errors

Mistakes can result in penalties or compliance checks. Common errors include:

  • Incorrect personal details, like your National Insurance number.
  • Miscalculations in income or expenses.
  • Forgetting to sign and date paper submissions. Double-check your return or use professional services to calculate figures accurately.

4. Include Child Benefit and Student Loan Repayments

If your income exceeds £50,000, you may need to pay the High Income Child Benefit Charge (HICBC). Similarly, ensure student loan repayments are calculated correctly, especially if you’re self-employed. HMRC shares income data with the Student Loans Company (SLC) to verify repayments.


5. Keep Detailed Records

Accurate record-keeping is essential for a correct tax return and protects you if HMRC asks for evidence. Keep:

  • Receipts for expenses.
  • Tenancy agreements for rental income.
  • Bank statements aligning with declared income.

6. Check Your Tax Code

Ensure your tax code is correct, especially if you’ve changed jobs or started receiving rental or investment income. An incorrect tax code can lead to under- or overpayments.


7. Use HMRC’s Online Tools

HMRC provides calculators for self-employment income, student loans, and expenses. Using these tools can reduce the risk of errors and make your submission smoother.


8. Seek Professional Advice

For complex financial situations, such as rental properties, offshore accounts, or multiple income streams, consult an experienced tax adviser. Professional advice will pay for it self, ensures compliance and peace of mind.

How HMRC Can Check Your Finances


HMRC has access to powerful tools and international data-sharing agreements to identify undeclared income and errors. Here’s how they ensure compliance:

1. The ‘Connect’ System

HMRC’s Connect system analyses vast amounts of data to identify discrepancies between tax returns and third-party information. Sources include:

  • Banks and financial institutions.
  • Land Registry and property records.
  • Online marketplaces like eBay and Airbnb.
  • Social media and advertising data for side hustles.

2. Automatic Exchange of Information (AEOI)

Through the Common Reporting Standard (CRS), over 100 countries exchange financial data with HMRC. This includes:

  • Offshore bank accounts and interest.
  • Investment gains.
  • Account balances and transactions.

3. Data Matching

HMRC cross-checks data from employers, banks, and institutions to spot inconsistencies. For instance:

  • Rental income is matched with property ownership records.
  • Dividend payments are compared to declared investment income.

4. Online Activity Monitoring

Platforms like Etsy, PayPal, and Airbnb are monitored for undeclared income. HMRC also investigates trading platforms for cryptocurrency or stock trading gains.


5. Voluntary Disclosure Campaigns

HMRC runs initiatives like the Let Property Campaign and the Worldwide Disclosure Facility (WDF), encouraging taxpayers to disclose undeclared income. Those who fail to comply face investigations and penalties.


Consequences of Getting It Wrong

Failing to file your tax return accurately or on time can result in severe consequences:

  1. Financial Penalties:
    • Late filing: A fixed £100 penalty for returns filed after 31 January.
    • Inaccuracies: Penalties of 30% to 200% of unpaid tax, depending on the severity of the error.
  2. Backdated Tax Demands:
    • HMRC can recover unpaid taxes for up to 20 years in cases of deliberate evasion.
  3. Criminal Prosecution:
    • Severe cases may lead to prosecution, fines, or imprisonment.
  4. Increased Scrutiny:
    • Non-compliance can result in future audits and ongoing monitoring.
  5. Reputational Damage:
    • Publicised cases of evasion can harm personal and professional reputations.

Act Now to Avoid Trouble

With the 31 January deadline fast approaching, now is the time to act. Filing an accurate tax return and meeting your obligations is the best way to avoid penalties and HMRC scrutiny. Use these tips, double-check your figures, and seek advice if needed.


For further assistance or queries, please contact us.

Leeds: 0113 320 9284                  Sheffield: 0114 272 4984

Email: info@shipleystax.com

Please note that Shipleys Tax do not give free advice by email or telephone. The content of this article is for general guidance only and should not be considered as tax or professional advice. Always consult with a qualified professional before taking action.

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