5 things you might not know about tax returns

5 things you might not know about tax returns

Tax returns are surprisingly interesting. No, really. They might sound like just another thing you have to do, and of course you do have to do them, but they actually have a large amount of striking aspects.

So, when you file your tax return remember there are some interesting points behind it and you’ll probably appreciate them just a little bit more.

Tax Return Fun Facts!

Well, without further hesitation – let’s explore some of the fascinating facts about tax returns you might not know about:

1. Over 6 Million People In The UK Have Paid The Wrong Amount Of Tax

Yes, it’s true. People pay too much tax, or too little. It’s not an insignificant problem, as is evident by the large amount of people mistakenly paying too much or too little.

The BBC reported on Exchequer Secretary to the Treasury David Gauke saying in 2010 that “we are determined to sort out this particular problem with overpayments and underpayments”. Still, it remains a rather annoying thing to deal with.

What a hassle! It can be difficult to file correctly, although the way it works with Tax Returns MadeSimple is that we file for you with HMRC – so you can avoid these irritating mistakes in the first place.

2. People Are Often Late In Filing – And They Have Some Interesting Excuses!

There are a lot of different ways that businesses fail to properly complete their tax returns, and filing it too late is one of them. It’s a simple deadline to miss when you’re up to our ears in the daily running your business – but HMRC don’t take too kindly to lateness, with a £100 penalty likely unless you can provide a reasonable excuse.

However, this doesn’t stop people coming up with wild excuses as to why they were unable to file on time. In 2014 HMRC released a series of the oddest excuses that people used to explain their lateness.

It’s compelling reading with ‘I had a run-in with a cow’, ‘Our business doesn’t really do anything’ and ‘I’ve been far too busy touring the country with my one-man play’ among the highlights.

3. In 2014 Over 500,000 Returns Were Filed On Deadline Day

However you feel about tax returns, you can’t deny that there is usually plenty of time given to prepare them. Those distinctive brown envelopes dropping through the letterbox come well in advance – still, people will sometimes not file until the last minute.

Simon Read, Personal Finance Editor for The Independent, reported in January 2015 that “According to HM Revenue & Customs, 6 per cent of all tax returns were sent in on deadline day last year – which works out at more than half a million”. Deadline day is really not a good time to start filling.

The stress of filing can be quite substantial, especially if you leave it until close to the deadline. We have a 7 working day turn around, so if you do leave it a bit late you can still get peace of mind that your return is filed correctly.

4. HMRC Can Check Compliance – And They Do!

Okay, you might have known about this fact already, but you’d be surprised by how many people don’t really realise that they can be investigated by HMRC. So, it’s something to be aware of – not the most fun fact in our list, but an important one.

Yes! Believe it or not, HMRC do check that everything has been filed correctly. This means that you or your company could be subject to a tax investigation. Now these might be due to some kind of discrepancy in your return – an entirely avoidable risk – but they can also be random.

Oliver Griffin, writing for the ICAEW (Institute of Chartered Accountants in England and Wales) member publication Economia in October 2014 said ”Prosecution rates have increased steadily over the last few years. The tax-year 2011/12 saw 302 prosecutions for tax evasion, less than half that of the figures for 2012/13”.

5. Many Small Business Owners Use ‘The F Word’ In Relation To HMRC

I know what you’re thinking, it’s quite understandable! But in this case ‘the F word’ is in fact ‘FEAR’. Yes, people running small businesses have a very distinct apprehension of HMRC. It’s big, it’s bureaucratic and it’s powerful – so no wonder people running businesses are at best slightly wary of it. Finance and business journalist Roland Gribben wrote for the Telegraph in 2012 on the subject. He stated that small business owners are haunted by worries about tax mistakes that will result in a visit or inquiries from the taxman”.

Although this fear is often not necessarily accurate, with Gribben quoting report (carried out for HMRC and the Office of Tax Simplification by The Futures Company) that said “Whilst many have experienced no problems, some small businesses can be disappointed in the quality and clarity of the response they get to questions from HMRC. This can cause significant frustration and increase reliance on other advisers”. So perhaps ‘the F word’ in relation to HMRC is not ‘fear’ – but more accurately, ‘frustration’.

Interestingly enough, Gribben stated that the report showed “Levels of anxiety are lower – although still significant – for those using an agent to help with tax administration”. Peace of mind is key reason our customers choose us.

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Making Tax Returns Interesting

Well, there you have the rundown of facts you might not have known about tax returns. It’s something every business has to do regularly, so when you file a tax return with us you will hopefully have a greater appreciation for the process – and find it that little bit more interesting too.

If you’d like to add your own thoughts please feel free to comment below. Also, make sure you check out the rest of our blog for more news and updates.

By Alex Novakovic at MadeSimple – Follow Alex on Google+

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