HMRC opened over 300,000 compliance checks in 2023\/24 according to their annual report<\/a>. Capital gains is a growing focus area \u2014 particularly as more retail investors trade online and the \u00a33,000 allowance catches more people in the net. Here are the mistakes that draw attention.<\/p>\n The biggest one. Many investors genuinely don’t know they need to file. If your total disposal proceeds exceed \u00a312,000 or your gains exceed \u00a33,000, you must submit SA108<\/a> \u2014 even if no tax is due. HMRC receives transaction data from UK brokers and increasingly from overseas platforms too. If your broker reports \u00a330,000 of sales and you filed no return, that’s a red flag.<\/p>\n Check our reporting thresholds guide<\/a> if you’re unsure.<\/p>\n US-influenced investors often match their oldest shares first (first-in-first-out). That’s wrong for UK CGT. HMRC uses average-cost pooling via the Section 104 pool<\/a>, with same-day and 30-day matching taking priority. FIFO and pooling produce different numbers \u2014 sometimes dramatically different. Using the wrong method means your return is incorrect.<\/p>\n This mistake is especially common among users of US brokers like Robinhood<\/a> and Tastytrade<\/a> whose built-in tax tools apply US rules. See our UK vs US rules comparison<\/a>.<\/p>\n Sold shares and bought them back within a month? The 30-day bed and breakfast rule<\/a> changes your cost basis. People who don’t know about this rule \u2014 or who trigger it accidentally through regular investment plans \u2014 end up with incorrect gains. This is particularly common with monthly auto-invest features on Freetrade<\/a> and Trading 212<\/a>.<\/p>\n If you trade US stocks, every transaction needs converting to GBP using HMRC’s official monthly exchange rates<\/a>. Using Google’s rate, your broker’s rate, or an annual average is technically incorrect. On large portfolios, the difference can be material.<\/p>\n Broker commissions, stamp duty<\/a>, and FX conversion fees all reduce your gain. Every pound of legitimate cost you miss is a pound of gain you’re overtaxed on. Keep records of every fee. See our record-keeping guide<\/a>.<\/p>\n ISA trades are exempt<\/a>. But if your broker’s CSV export mixes ISA and GIA transactions (as some do), and you feed the whole file into a calculator, your reported gains will be wrong \u2014 potentially in either direction. Always filter out ISA rows first.<\/p>\n If you sold investments at a loss and didn’t report it, those losses are wasted<\/a>. They can’t offset future gains unless you’ve claimed them within four years. Many investors leave money on the table by ignoring loss-making disposals.<\/p>\n HMRC’s approach depends on whether the error was careless or deliberate. The gov.uk penalties guidance<\/a> sets out the framework:<\/p>\n1. Not reporting at all<\/h2>\n
2. Using FIFO instead of pooling<\/h2>\n
3. Ignoring the 30-day rule<\/h2>\n
4. Not converting foreign currency correctly<\/h2>\n
5. Forgetting allowable costs<\/h2>\n
6. Including ISA trades<\/h2>\n
7. Not claiming losses<\/h2>\n
What happens if HMRC finds errors<\/h2>\n