The Most Common Mistakes We See on Self-Assessment Tax Returns

1. Missing income sources

Self Assessment requires you to declare all taxable income, not just your main source of earnings. Bank interest, savings income, dividends from investments, rental income from property, freelance or consultancy income alongside employment, and income from overseas sources are all commonly missed. HMRC receives data from banks, investment platforms, and other sources, and it will identify discrepancies between what you declare and what those third parties report. Omissions - even accidental ones - can trigger enquiries and penalties.

2. Underclaiming expenses

Many self-employed people do not claim everything they are entitled to, leaving money on the table unnecessarily. Common areas of underclaiming include the use of home as office (either the flat rate or a calculated proportion of household costs), business mileage, professional subscriptions and memberships, training and development costs directly related to the business, and equipment purchased for work purposes. The rules on what is allowable can be nuanced - particularly around anything with a dual personal and business use - but with proper records most legitimate business costs can be claimed.

3. Errors with employment income

If you are both employed and self-employed, it is easy to introduce errors at the junction between the two. P60 figures need to be entered accurately - using the gross pay figure rather than the net, or transposing digits, are surprisingly common mistakes. Benefits in kind provided by an employer and shown on a P11D also need to be included. And if you have had more than one employer in the year, all sources need to be captured. Getting your employment figures wrong can affect both your tax liability and your entitlement to certain reliefs.

4. Missing the pension contribution deadline

Personal pension contributions made in a tax year can reduce your income tax liability for that year - but only if they are made before 5 April. This deadline is fixed and does not move. If you are approaching the year end and your tax liability is higher than you would like, making a pension contribution before 5 April is one of the few remaining levers available to you. It is worth reviewing your position in February or March rather than leaving it until April when it may be too late to act.

5. Filing late

The online Self Assessment deadline is 31 January following the end of the tax year. Missing it results in an automatic £100 penalty, even if you have no tax to pay. Penalties continue to escalate - a further £10 per day after three months, and larger charges at six and twelve months. The penalty regime is unforgiving, and HMRC exercises very limited discretion. If you would like us to handle your Self Assessment return, or review a return you have prepared yourself, please get in touch well before Christmas. January is always too late to start.

6. Student loans

Remembering that you have a student loan in place for self employed tax payers is also commonly missed. HMRC are aware of this and will adjust this in your tax liability, however if you also leave things late you run the risk of getting a bigger tax bill than expected along with interest for not paying on time.