Avoidable mistakes on your tax return is this weeks topic.  It's tax season, and the stress of preparing your return can feel overwhelming. But don't worry - I Hate Numbers is here to help! On this week's podcast, I'm talking about Avoidable mistakes on your tax return, five of them to be exact.

The first mistake I'll be discussing is student loans. Many taxpayers are unaware that they may be liable for student loan deductions.  It pays to do your research and see if you're eligible! Ignoring these potential deductions can cost you precious money in the long run.

Next, I'll dive into the impact of COVID on both employees and directors who work from home. Many taxpayers don't realize that they may be able to deduct expenses related to working from home. Don't let a well-deserved deduction slip through the cracks!

I'll also cover self-employed expenses and how those deductions can add up over time. Self-employed taxpayers have plenty of options for reducing their tax liability, but it's important not to overlook any possible deductions.

Another key area I'll discuss is the High-Income Child Benefit Charge. This applies to families with high income earners - if you fall into that category, make sure you know what applicable charges could affect your taxes this year!

Finally, I'll talk about Gift Aid payments and how those might factor into your return. It's crucial to understand how these payments will be taxed - otherwise you could be missing out on valuable savings opportunities!

Don't miss out on these essential insights - tune in for my I Hate Numbers podcast on five mistakes people make with their self-assessment tax returns! With my guidance, you can save yourself time, money, and stress this tax season.

Conclusion and good to know

The I Hate Numbers podcast isn’t just about taxes though.  Other topics are covered, for example cash flow management, budgeting, forecasting, debt management and more! Every episode provides actionable advice from experienced professionals who explains complicated concepts in an easy-to-understand way.

I understand that dealing with finances can feel overwhelming at times but don’t let that stop you from taking control of your finances! Tune into my I Hate Numbers podcast today where we provide vital information plus practical advice in a fun way!

Need help with this process, please don’t hesitate to contact me. I’d be happy to advise you on your taxes and how to minimise them.

It's not unusual that when taxpayers are preparing their tax returns, that mistakes will be made, things forgotten, things omitted. Tax returns can be quite daunting, quite stressful, and I wanna share with you on this week's podcast. Five mistakes, five omissions that taxpayers will often make when preparing their own tax returns.

This is based on over 28 years experience of me and my team in, I Hate Numbers when we prepare our clients' tax returns contributing to the 12 million tax returns expected by HMRC.

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers Podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Let's crack on with the first one. The first one is the student loan. It's not unusual for taxpayers to forget to include detail of their student loan when they're preparing their tax return. So I'm just gonna give you a quick reminder what's involved. Now there are currently in the UK four types of student loan that will be relevant.

They're called a plan one, a plan two, strangely there's no plan three, a plan four, and a postgraduate loan repayment. Now those loans that I've identified are based on when the loan was first taken out. So if you took out a student loan prior to the 1st of September, 2012, you'll be on a Plan one student loan.

If you took it after the 1st of September, 2012, then you're on Plan two. Plan four, by the way, is for those people in Scotland who've taken out student loans. And a postgraduate loan repayment is if you've taken out a master's loan or doctoral loan, then you'll be within that remit. The thing that's relevant here is when you have to start paying that student loan back, and it's based on the income that you have for the tax year in question.

So for 21-22, for example, we're looking at approximate figures here, exact details were being given in the show notes, 20,000 pounds a year plus, and you could have started paying back on your plan one student loan. It becomes a bit more relaxed, bit higher for student loan type two, and that's 27,000 pounds a year.

Plan four for Scotland is 25,000 odd, and for the postgraduate loan repayment, it's 21,000 pounds a year. Now, typically, if you are in PAYE, by the way, you can relax it a little bit more because that should be taken off by your employer as you are earning your salary. If you are self-employed, you'll be taken off via the self-assessment tax regime

and if you've got a mixed income, you've got some P A Y E, some student loans, then we're looking at a combined income, so it's likely you'll be missing those out. Now if you miss those out by the way folks, then your tax will be readjusted. That will affect what's called payments on account, and also they'll be interest to pay if it's picked up quite late.

So make sure you include the relevant details of the student loan. Mistake number two is when it comes to something officially called the high income child benefit calculation, and what this means is as follows: if you or your partner are classified as a high earner and a high earner, by the way, is if you or your partner earn over 50,000 pounds a year.

Now, if you earn over 50,000 pounds a year, and you're also claiming child benefit, this applies to you. Now, perversely, both of you could be earning 49,999 pounds each, and this will not apply to you is if either of you earns 50,000 pounds a year plus, then the higher earner is the one who has to declare this on their tax return.

What you need to disclose is how many children you've got. How much child benefit you received, and if you are over 50,000 pounds is what's called adjusted net income. Then there will be a clawback of the child benefit that you paid. Again, check the show notes here for a detailed calculation. What we're more concerned at this stage is to make sure it's not emitted.

If you do miss it out, by the way, HMRC do have the access to those records. They will catch up with you, they will find out, and you'll have to pay not only back the child benefit, but you're liable to pay interest and penalties, as well. So again, think carefully. And one way to avoid it, by the way folks, is not to claim the child benefit, but child benefit is number two.

The third area is when it comes to claiming expenses. Now many self-employed people, quite often, they will not necessarily think about the expenses they've got, and there's a whole variety of expenses that you can claim. Anything you incur in respect of generating that self-employed income is fair game and you can have a look at that.

And as a self-employed individual, even if you've got split costs, like your phone has been used for business and personal, you can claim a proportion of that. The good news is, folks, by the way, you can go back four years to claim anything retrospectively. The next, and the fourth item is expenses when you are working from home, either as a company director of your own company or somebody else's company.

You can claim a flat six pounds per week for working from home, for using facilities and the space at your home in connection with your business. The other variation is if you as an employee have had to work from home, we have lockdown during 2122. Even if it's just for a day, then you can claim 312 pounds for the whole year.

And if you are a high rate taxpayer, that's good news and that will chop your tax bill down and potentially you may even get a refund as well. And this applies to employees, so therefore it's a claim worth looking at. Again, in the show notes, I'll give you a link for some further detail. The last one I wanna mention is when it comes to gift aid.

Now, if you are somebody who donates to charity, then two things will happen. One, the charity can claim back tax on your donation under what's called a gift aid scheme, but you also can claim that back as well. So if you are a higher rate taxpayer, that means you'll effectively reduce the amount of tax that you pay

because more income is taxed at what's called a lower rate, and that's gonna be good news. If, however, by though, folks, if you haven't, for example, gone into that higher rate tax bracket, approximately 50,000 a year plus, remember if you haven't paid any tax during the course of the year that you made that donation, then a charity, technically speaking, will have to pay that.

But more often than not, H M R C will come after you for that gift aid payment that's being made. So when you do make gift aid payments, remember you should have suffered the equivalent tax being claimed back. If you made a donation of 80 quid, the charity gets back 20 quid on top. If you're a higher rate tax payer, that will reduce the amount of tax that you pay, which is obviously gonna be good news that may not have inspired you to make the donation in the first place, but it's a good thing to have as a consequence. And remember,

if historically you've made gift aid payments and not claimed any production in your tax bill, you can retrospectively adjust your tax returns. Folks, that's five areas that I've ventured. There are loads more to think about and loads more to consider, but certainly those are five that are relatively common that most taxpayers will not address and possibly miss out on.

Hope you found this podcast useful and valuable. If you have, I'd love to hear some comments and feedback. If you feel there's somebody who could benefit from this, I'd love it if you could share it with them. Until next week, folks, we hope you enjoyed this episode and appreciate you taking the time to listen to the show.

We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.