Paying tax is not always as straightforward as it should be, with many individuals and businesses struggling to understand their tax liabilities and the ways to plan their affairs better so that less tax becomes payable.
Even when not seeking to minimise or tax plan, it is still sometimes the case that paying the right amount of tax is not that straightforward. Using professionals such as Cheltenham accountants will ease this burden considerably, but let’s take a look at some of the most common mistakes and tips for avoiding them.
Common mistakes when paying tax
Failing to identify the taxes that are due is a common mistake; for example, someone who rents out a property will need to complete a self-assessment tax return even if they are not making a profit when they take into account mortgage interest.
Another common mistake is to fail to plan appropriately. Different taxes are payable at different points throughout the year depending on the individual’s situation. Capital gains tax, such as on the sale of a rental property, is due within 60 days of the sale rather than at the same time as the self-assessment.
Missing deadlines will lead to increased tax liability and possibly fines. Engaging an expert such as https://www.randall-payne.co.uk will minimise these risks.
Action points to pay the right amount of tax
Make yourself aware of the different taxes you may be liable for, checking with HMRC if you are not sure.
The key to ensuring the correct amount of tax is paid is to plan ahead, seek advice, and stay on top of your administrative processes. A regular review with an accountant will support this and ensure you don’t get caught out paying less or more tax than you should.