Made minor mistake in tax return - should I inform hmrc?

[cavell]

By minor, I mean less than £50. I missed out the interest on one of my savings accounts by mistake. But even with this sum taken into account, I don't earn enough atm to pay tax. Do I need to inform hmrc, given that this will make no difference to the amount of tax due? I'm worried I will be be fined for a careless mistake if I inform them about it.

The actual amount is £21. If that is relevant at all.

They will find out anyway as the banks report it and their systems match it up eventually.

I would say it is not a 'careless' mistake probably but in any case, admitting to it goes down a lot better than not.

On the other hand presuming it was taxed at source you'll probably get that tax back.

It is minimal enough for me not to bother changing for a client (I am a chartered accountant) but for your peace of mind I would probably correct it if I were you. I'd be very surprised if there were any penalty involved.

Nooooo

Thanks for the responses... I filled in an R85 so the interest wasn't subject to tax in any case. No income tax liability for me this year - nor has anything been paid. The undeclared interest will not affect this.

The thing is, I read somewhere about an £800 fine for mistakes in tax return, which worries me. On the other hand, I don't want to risk prosecution for tax fraud or whatever if I don't admit it and the mistake somehow comes to light.

I guess I will have to come clean - would it be better to write a letter, enclosing photocopies of bank statements, or will a phone call suffice?

Best not to declare it. The mighty HMRC a) do not expect self-assessors to be 100% perfect, b) are not going to hunt you down for £20 and, c) if the mistake comes to light at a later date it'll just be a minor adjustment to your tax-code. I made a £400 mistake on my 2010/11 return and that's how it was dealt with... no fines, no prosecution, no drama

There is zero chance of you getting an £800 fine. Penalties (official word for HMRC fines) are on a sliding scale of the tax owed, from 0% to 100% depending on lots of things but mainly whether they find out or you tell them, whether you cooperate with them and whether you help them work out the tax due.

I wouldn't worry about it myself but you are going to be in no trouble for owning up and it may well give you peace of mind. You can just ring them and they will often change it over the phone.

Advice just 'not to tell' is naive and could get you into a whole load of trouble if it were a bigger amount.

Out of interest, why do you have to complete a tax return if you usually pay no tax?

I always get sent a tax return... ever since I put some money into an ISA (or might have been a PEP), I think. I've been sent one each year for about 15 years now. I'm not actually sure why - hmrc just send me one to fill in.
I assumed everyone had to do one these days. DH always gets sent a tax return to complete, too. He is in regular salaried employment - it isn't as if he's self-employed.

Just go in to the online return, change it and resubmit it. You should do this as soon as you can, although you can resubmit any time up to 31 January 2014 and if there is no additional tax to pay there will be no penalty.

If you are not reclaiming tax paid I can't see much point in you continuing to complete a return: call HMRC and suggest they stop sending you one.

Thanks for helpful replies. I also realised the day after 31st jan that I had missed out an income source and was not sure what to do. As a chartered accountant i was so ashamed

Ring them up to tell them about the omission, and also ask why you need to complete a form. They should take you off their "list".

Get your DH to do the same, unless he is a higher rate tax payer, or if he receives any expenses or benefits relating to his employment. (Or if he regularly gets a refund!)

Thanks for all the responses. I submitted an amended tax return over the internet earlier today (hadn't realised that was a possibility).
I will phone up in the near future to ask to be taken off their list.
Reasonably confident that won't happen now - I can sleep at night once again! Thanks.
(If I do have any problems, I will update the thread).

Well done. I know it was just a small amount but it wasn't much hassle and gives you peace of mind.