Every tax return is a little like solving a puzzle. Most of the pieces fit together exactly as expected, but occasionally something doesn’t quite make sense. A figure is unusually high, a transaction appears out of place, or an expense has been categorised incorrectly. Those small details are often where the most valuable conversations begin, helping resolve innocent mistakes before they become bigger issues.
As Scott Reynolds, Tax Associate, explains:
“Most of the mistakes we come across are genuine. People are experts in running their businesses. My job is understanding the tax rules.”
The small details that reveal the bigger picture
The first thing Scott looks at isn’t the profit and loss account or the tax calculation. It’s the bank statements.
“If the bank’s wrong, everything’s wrong,” he says.
Reconciling opening and closing balances provides confidence that every transaction has been accounted for. From there, Scott compares the figures against previous years.
A significant increase in a particular expense category or an unexpected drop in income doesn’t automatically mean something is wrong, but it does raise a question. Has the business changed? Has something been coded incorrectly? Is there additional information that hasn’t yet been shared?
This sense-checking process often highlights issues before they ever become a problem.
Some of the most common examples include:
• Claiming personal expenses as business costs
• Duplicating expenses by recording both an invoice and a receipt
• Claiming both mileage and vehicle running costs for the same car
• Recording capital purchases, such as laptops, as day-to-day expenses rather than fixed assets
These aren’t unusual mistakes, and they’re rarely intentional. They simply demonstrate why experienced review remains essential. Read our article on mastering tax preparation.
Why conversations matter just as much as the paperwork
Preparing a tax return is never just about the documents provided. One of the first questions that should be asked, is what has changed this year? The answer might have nothing to do with the business itself. Marriage, divorce, moving home, pension contributions, selling assets, receiving rental income or starting a side business can all influence a client’s tax position. Without those conversations, important information can easily be missed.
Scott recalls one example while preparing charity accounts. A £10,000 transfer appeared on a bank statement that hadn’t been seen before. After asking a simple question, it became clear the charity also had a savings account that hadn’t been included in the records. That single transaction uncovered an entire year’s worth of additional statements, together with interest income that also needed accounting for. All saving possible investigations and fines from HMRC.
Technology is helpful, but experience provides context
Modern accounting software has transformed tax preparation. It imports transactions, performs calculations and flags obvious validation issues far more quickly than ever before. However, software can only assess the information it’s given. It can’t recognise that a laptop has been coded incorrectly, identify missing conversations or understand the wider context surrounding a client’s financial circumstances.
As Scott puts it: “Software is very good, but it misses context.” Professional judgement still plays a vital role in identifying risks before they become HMRC enquiries.
For business owners, three simple habits can make the process smoother:
• ensure all income has been included, including interest, rental income or additional earnings
• regularly reconcile bank accounts throughout the year
• keep your accountant informed whenever significant personal or business changes occur.
Organisation matters too. Well-organised records don’t have to be perfect, but having complete information available allows tax accountants to make corrections before returns are submitted.
Ultimately, tax preparation isn’t about trying to catch clients out. It’s about asking the questions HMRC might ask later, while there’s still time to resolve any issues.
Get in touch with the team
Scott and the team work with businesses and individuals to deliver professional tax preparation services, helping ensure tax returns are accurate, compliant and submitted on time. By identifying potential issues early and providing practical tax advice throughout the year, Hayward Wright helps clients minimise risk and plan with confidence.
If you’d like to discuss your tax return or learn how proactive tax planning can benefit you or your business, speak to the team at Hayward Wright.