Has a mistake on your tax return cost you money?

As the deadline for submitting online tax returns looms, new Which? research reveals one in five people (19%) think they’ve lost out because they’ve made a mistake on their tax return, or haven’t understood the document.

Last year, more than 10 million tax returns were submitted to HM Revenue and Customs (HMRC), but when Which? surveyed people who have completed a tax return, we found that the process is confusing and one in five people think they’ve made a mistake that has cost them money. Property income is most likely to cause confusion, with 34% of people struggling to understand the rates and allowances. Our research found:

  • 34% say they struggle with the tax rules for property income

  • 32% say they struggle with the tax rules for dividend income

  • 31% say they struggle with the rules on pension contributions

  • 28% say they struggle with the tax rules around employee allowances

  • 24% say they struggle to understand rates and allowances for savings income

Making a mistake on your tax return could end up costing money; whether it’s an additional tax bill or a penalty for a miscalculation, HMRC’s system of penalties could be as much as 70% of the tax owed.

Tax returns need to be completed by people who are self-employed, a business partner or director of a limited company and ministers of religion. They also need to be completed by employees or pensioners with an annual income of £100,000 or more, those who have a pre-tax investment income of £10,000 and trustees or representatives of someone who has died. Failure to submit a tax return before the 31st January deadline could leave you with an automatic £100 fine, which will increase the longer the delay before submitting.

Which? has worked with SimpleTax to launch a new free-to-use online tax calculator, – available at which.co.uk/taxcalculator – to help people complete their tax returns. Designed to make filing tax returns quicker, our jargon-free calculator ensures consumers do not miss any potential allowances or deductions as well as explaining their tax liability instantly.

Gareth Shaw, Head of Which? Money Online, said:

“The thought of completing a lengthy, complex tax return form full of jargon is off-putting and understandably confusing for many. It’s not surprising to see that property and investment taxes come out high in the list of what baffles consumers – these have been tinkered with continuously in recent years.

“If you put your tax return off and file late or make a mistake, you’ll face a fine from HMRC. Our online tax calculator will help make completing a tax return less taxing.”


Notes to editors

  1. Which? research: In November 2016 Populus asked 4,174 members of the UK general public if they filled in a self-assessment tax return in the last two years. The 628 who told us that they had done so at least once were asked a number of follow up questions about their current situation and which parts of the tax return they struggled with.

  2. 2015 tax return data: https://www.gov.uk/government/news/another-record-breaking-year-for-self-assessment

  3. Tax calculator: Which? has teamed up with SimpleTax to offer a new online tax calculator. Members, including those on a membership trial, can file their self-assessment return direct to HMRC for free using the calculator. Non-members can submit their returns using the calculator for a small fee.

  4. SimpleTax: More information about SimpleTax can be found here – https://www.gosimpletax.com/

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