With the self-employed estate agency model continuing to grow across the UK, some of the most common tax errors have been highlighted by RIFT Tax Refunds.

These four simple mistakes could end up costing the self-employed thousands of pounds, according to the accounting firm:

Putting off your tax return

The first common error highlighted is putting off the submission of a tax return until the last minute. This, says RIFT, can result in undue stress, mistakes being made and, potentially, missing the deadline altogether.

Once a tax deadline is missed, there is a penalty, starting at a minimum of £100 for being one day late. There is then an additional £10 penalty for every further day that the tax is not paid. The fines increase when payment is three months overdue, and again when payment is six and 12 months late respectively.

In the most serious cases, the eventual fine can be 100% of the tax you owe, effectively doubling the money you pay, warns RIFT.

Sloppy input

Attention to detail is of utmost importance, RIFT emphasises. Submitting incorrect information can result in underpaying tax, for which you’ll have to make up the difference. It can also result in overpaying, requiring additional work to eventually reclaim.

If you make a mistake but HMRC decides you took ‘reasonable care’ when completing your return, you won’t be issued with an additional penalty fine. However, if they think ‘reasonable care’ hasn’t been taken, the additional fine can be as much as 30% of underpaid tax, RIFT warns.

Failing to claim expenses properly

Expenses for the self-employed can include travel expenses, a phone bill and hardware. There are complex rules as to what constitutes a business expense, so you’ll need to read the rules closely, RIFT advises.

Getting expenses wrong could see you miss out on claiming for suitable costs and therefore paying too much tax, or claiming for inappropriate expenses and drawing negative attention from HMRC.

Forgetting about payments on account

Many people don’t realise that HMRC often makes you pay some money towards next year’s tax bill at the same time as paying this year’s, RIFT observes. The system is designed to help the self-employed better manage their finances by paying in smaller chunks rather than all at once. However, RIFT points out that it can be a nasty surprise if you’re not expecting it, so you need to make sure you’ve put aside enough money to pay the additional amount.

Not claiming back overpaid tax

HMRC will often proactively return overpaid tax in the form of a tax rebate, but it’s not 100% foolproof, says RIFT. It is, therefore, important that everyone knows how much tax they’ve paid and whether or not this properly aligns with their income and expenses.

According to RIFT, the average tax rebate in the UK is more than £1,500.

Bradley Post, CEO of RIFT Tax Refunds, commented: “Tax is a gruelling feature of everyone’s life, but one that is essential for the successful running of society. It’s essential to pay what you owe, but too many people end up paying more than they owe through mistakes or understandable gaps in their taxation knowledge.”