Completing your Self Assessment if you’re self-employed is a crucial process to make sure you’re paying any tax owed and staying compliant. However, it’s not uncommon to make Self Assessment errors - especially if it’s your first time filing!

The problem is that sometimes these errors can lead to delays in filing or even penalties from HMRC! So it’s crucial to educate yourself on how to submit your Self Assessment as someone self-employed.

The most common Self Assessment mistakes

Here are the five most common Self Assessment errors and practical tips on how to avoid them:

1. Failing to keep accurate records

If you're keeping inadequate records then chances are you’re likely to miss payments or expenses that can lead to errors in your Self Assessment.

How to avoid doing this:

Implement a robust record-keeping system. Use accounting software like Crunch to track your income and expenses throughout the year. Set time aside to update these records regularly to ensure you aren’t missing anything.

We recommend always working with a trusted and experienced accounting professional who can help guide you through the process and answer any accounting questions you have.

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2. Misunderstanding allowable expenses

There’s often some confusion about what constitutes an allowable expense for tax purposes. Some self-employed individuals incorrectly claim personal expenses or fail to claim legitimate business expenses. Both Self Assessment errors can impact tax liability.

Steps to take:

Familiarise yourself with HMRC guidelines on allowable expenses. If you aren’t sure, feel free to check out our articles covering expenses to claim as a Sole Trader and expenses you can claim as a Limited business. The next step is to make sure you’re managing your expenses properly. You’ll need to keep detailed records, receipts and documentation of any expenses you plan to claim.

3. Missing deadlines

Missing tax return deadlines is a common issue, often leading to penalties and interest charges. Deadlines for self-assessment are strict, and failure to meet them can have financial consequences.

How to avoid this error:

Mark important deadlines on your calendar and set reminders well in advance. If you aren’t sure what dates you should be adding, be sure to check out our key dates in the UK tax year article. Another way to ensure you aren’t missing deadlines is by working with a reputable accountant like Crunch. 

4. Not claiming tax relief and allowances

Self-employed individuals sometimes overlook available tax reliefs and allowances, which can result in paying more tax than necessary. Common examples include relief for pension contributions or the Annual Investment Allowance for capital expenditures.

What to do:

Stay informed about available tax reliefs and allowances. Review HMRC’s resources or consult with a tax professional to ensure you’re claiming all relevant reliefs and allowances. Regularly review changes in tax legislation that might affect your eligibility for different reliefs.

5. Not stating other income sources 

Many people who are both self-employed and employed don’t realise that they need to submit money made from both sources. Other income sources often overlooked are things like online content creation earnings, savings and investments, or shares or assets for a profit. 

Not sure what to declare?

If you have a second job and you’re wondering what you need to do, be sure to check out our article here. If your income is coming from a different source, you can utilise the HMRC’s checking tool. After completing a short questionnaire, you’ll get a quick answer on what you need to declare.

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Key takeaways on avoiding Self Assessment errors

Avoiding these common Self Assessment errors requires diligent record-keeping, understanding of tax regulations, and timely action. By implementing the strategies outlined, you can streamline your Self Assessment process, minimise the risk of errors, and ensure compliance with UK tax laws. If in doubt, don’t hesitate to seek professional advice to navigate complex tax matters effectively.

Still need extra help?

If you’re still feeling a little overwhelmed then don’t panic, this is why the majority of self-employed individuals work with a reputable accounting partner like Crunch. So whether you just need a one-off Self Assessment or are looking for an ongoing accounting solution, feel free to reach out! We offer a free no-obligation consultation with tax experts who will help find the right accounting solution for you!

Book a consultation

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