Common Self Assessment Tax Mistakes and How to Avoid Them

3. Forgetting to Report All Sources of Income

Many taxpayers fail to include income from dividends, property rentals, savings interest, or freelance work. HMRC requires all taxable income to be reported.

How to avoid it:

• Make a list of all your income sources before starting your return.
• Review HMRC’s guidance on taxable income to ensure nothing is missed.

4. Claiming Incorrect Expenses

It can be tempting to claim expenses without fully understanding HMRC’s rules. Claiming non-allowable expenses may lead to penalties, while failing to claim allowable expenses means you could pay more tax than necessary.

How to avoid it:

• Familiarise yourself with HMRC’s list of allowable expenses.
• Keep receipts and records to support your claims.
• Seek advice from an accountant if unsure.

5. Not Making Payments on Account

If you are self-employed or have significant untaxed income, you may be required to make payments on account. Many people overlook this and end up facing unexpected bills.

How to avoid it:

• Check if payments on account apply to you.
• Plan ahead and budget for these payments to avoid cash flow issues.

6. Failing to Seek Professional Support

Trying to handle Self Assessment alone can often lead to mistakes, especially if your finances are complex.

How to avoid it:

Consult a qualified accountant who can guide you through the process, help minimise your tax liability, and ensure full compliance with HMRC regulations.