Common Self Assessment Mistakes
Every year, thousands of self-employed people make avoidable errors on their tax returns. Here are the most common mistakes – and how to sidestep them.
1. Missing the Deadline
The mistake: Leaving everything until January and missing the 31st.
The cost: Automatic £100 penalty, plus more if you're months late.
The fix:
- File as early as possible after 6 April
- Set multiple calendar reminders
- Don't wait until you have a "perfect" number
2. Not Saving for Tax
The mistake: Spending all your income, then scrambling to find money in January.
The cost: Stress, potential debt, or having to set up a payment plan.
The fix:
- Set aside 25–30% of profit as you earn
- Use a separate savings account
- Never touch the tax pot
3. Forgetting Payments on Account
The mistake: Budgeting only for your tax bill, not the advance payments.
The cost: Cashflow shock in January (tax bill + first POA) and July (second POA).
The fix:
- Understand that POA = 50% of last year's bill, twice
- Budget for the January double-hit (especially first-timers)
- Read our POA guide
4. Not Claiming All Expenses
The mistake: Only claiming obvious expenses, missing legitimate deductions.
The cost: Paying more tax than necessary.
The fix:
- Keep all receipts
- Track home office, phone, travel, software, subscriptions
- See our expenses guide
5. Overclaiming Expenses
The mistake: Claiming personal expenses as business costs, or inflating figures.
The cost: Penalties, interest, and potential fraud investigation.
The fix:
- Only claim what's genuinely for business
- Calculate mixed-use proportions honestly
- When in doubt, don't claim it
6. Mixing Up Turnover and Profit
The mistake: Confusing how much you invoiced with how much you actually made.
The cost: Incorrect tax calculations.
The fix:
- Turnover = Total income (before expenses)
- Profit = Turnover minus allowable expenses
- Tax is calculated on profit, not turnover
7. Wrong Accounting Period
The mistake: Using calendar year (Jan–Dec) instead of tax year (6 Apr – 5 Apr).
The cost: Reporting income in the wrong year.
The fix:
- Use 6 April to 5 April for your accounts
- Or, if you use a different year-end, understand the overlap rules
- Most sole traders keep it simple with the tax year
8. Not Registering in Time
The mistake: Starting self-employment but not telling HMRC until it's too late.
The cost: Penalties for late registration.
The fix:
- Register for Self Assessment by 5 October after the tax year you started
- Do it online at gov.uk
- Allow 2 weeks for your UTR to arrive
9. Ignoring Class 2 and Class 4 NI
The mistake: Only calculating Income Tax, forgetting National Insurance.
The cost: Underestimating your total tax bill.
The fix:
- Class 4 NI: 6% on profits £12,570–£50,270; 2% above
- Class 2 NI: Usually paid through your SA bill
- Use a calculator that includes both
10. Not Keeping Records
The mistake: Throwing away receipts, not tracking invoices.
The cost: Unable to prove expenses if HMRC asks; may have to pay more tax.
The fix:
- Keep records for at least 5 years
- Digital copies are fine (photos of receipts)
- Use accounting software or a simple spreadsheet
11. Entering Wrong Box Numbers
The mistake: Putting figures in the wrong boxes on the return.
The cost: Incorrect calculation, potential enquiry.
The fix:
- Read the guidance for each box
- Double-check before submitting
- Use software that guides you through
12. Forgetting to Declare All Income
The mistake: Missing income from side gigs, cash jobs, or multiple platforms.
The cost: If HMRC finds out, you'll pay tax + penalties + interest.
The fix:
- Report ALL self-employed income
- Include bank transfers, PayPal, cash, crypto
- HMRC has data-matching with platforms
13. Not Checking for Errors Before Submitting
The mistake: Clicking submit without reviewing.
The cost: Having to amend the return, potential issues.
The fix:
- Review the summary page carefully
- Check income, expenses, and calculated tax
- Keep a copy of what you submitted
Quick Checklist Before You File
- Have I included all income sources?
- Have I claimed all allowable expenses?
- Is my profit figure correct (income minus expenses)?
- Have I budgeted for Payments on Account?
- Are all numbers in the right boxes?
- Do I have records to back up my claims?
This article is for general information only. It's not financial or tax advice. Always check HMRC guidance and speak to a professional if you're unsure.