What Is Self-Assessment?
Self-assessment is the system used by HMRC (Her Majesty Revenue and Customs) to collect Income Tax from individuals whose tax is not automatically deducted from their salary. While most employees have taxes deducted through the PAYE (Pay as You Earn) system, self-employed individuals and others with specific financial situations must report their income and pay taxes through self-assessment.
Self-employed people, freelancers, contractors, and small business owners are legally required to submit a self-assessment tax return. This involves reporting your earnings and calculating the tax you owe. You must also make two advance payments towards your tax bill, one by January 31 and another by July 31 each year.
What is the most common Mistake When Filing Self-Assessment tax return?
This guide highlights the most common and costly mistakes made when Filing Self-Assessment tax returns, along with tips on how to avoid them in the future
1.Missing/inappropriate UTR or NI number
Your UTR (Unique Taxpayer Reference) is the unique ten-digit reference number that enables HMRC to identify you. You will need it when completing your Self-Assessment tax return. Be careful when entering it. If you have not completed a Self-Assessment tax return before, you need to register as self-employed with HMRC, at that point you will also receive your UTR number.
Your Self-Assessment tax return should also include your correct National Insurance number. If you have misplaced or forgotten your UTR, you can find it in your Personal Tax Account, on the HMRC app, on previous tax returns (if applicable), or in other HMRC documents you have received. You could also locate it by digging out an old pay slip or P60. If all else fails, contact HMRC.
How to avoid
To avoid this common mistake, it is useful to have your UTR and NI numbers on hand somewhere memorable and easily accessible, especially during tax season. Sensitive information should not be written down on a piece of paper. Instead, try noting these numbers in a secure, encrypted notes app.
- Ticking the wrong box(es)
This error often occurs due to lack of knowledge or insufficient attention when completing your Self-Assessment tax return. If you are unsure, read HMRC’s guidance on filling out your Self-Assessment tax return or seek personalized expert advice. Always double-check to ensure you are ticking the right boxes.
How to Avoid
To avoid ticking the wrong boxes on your Self-Assessment tax return, make sure you read HMRC’s instructions carefully, so you know which parts of the form apply to you. If you are not sure, it is a clever idea to ask a tax expert for help. Take your time when filling out the form, as rushing can lead to mistakes. Always check your work before submitting to ensure everything is correct. You could also use tax software, which can guide you through the process and help prevent errors.
3.Incorrect figures or incomplete information
Whether through carelessness or poor calculation, sometimes people get their figures wrong when adding up their income and/or expenses, leading to incorrect data in their Self-Assessment tax return. To avoid this, double-check your calculations to ensure they are correct.
In other cases, people fail to answer all relevant questions or provide the required information. You cannot simply omit information with a plan to provide it later. If you do, HMRC will request it when they spot any omissions, leading to unnecessary delays. Ensure that if information is requested, you include it.
How to avoid
To avoid mistakes with numbers or missing information on your Self-Assessment tax return, make sure you double-check all your calculations. Take your time and ensure you have included all the details asked for. Do not skip any questions or leave anything out, thinking you will fix it later, because HMRC will ask for the missing information and that can cause delays. Keep good records of your income and expenses throughout the year to help you fill in the form properly. If you are unsure, get advice from a tax expert to make sure everything is correct.
- Over-claiming allowable expenses
Sole traders, landlords, or individuals can claim allowable expenses for certain costs. However, some Self-Assessment tax returns include claims for expenses that are not allowable, or they claim for personal rather than business-related expenses. To be allowable, expenses must be generated “wholly and exclusively for trade.”
Whether due to lack of knowledge or an attempt to reduce tax liability, HMRC action could result if your Self-Assessment tax return includes inaccurate or unprovable expenses.
How to avoid
The best way to avoid this error is to familiarize yourself with the list of allowable expenses. When completing your tax return, although you do not need to provide proof of expenses, keep a clear record of all your business receipts to ensure you claim the correct amount.
5.Under-claiming allowable expenses
In some cases, lack of knowledge or experience causes individuals to miss claiming allowable expenses, resulting in a higher Income Tax bill than necessary. Researching allowable expenses or seeking personalized professional advice can help ensure that the expenses entered on your Self-Assessment tax return are accurate, so you do not overpay taxes.
How to avoid
As with over-claiming, familiarize yourself with the list of allowable expenses. Keep a clear record of all business receipts and ensure you claim the correct amount on your tax return.
6. Not including all income
If done deliberately to hide earnings and reduce tax liability, it is called underreporting, which is tax evasion—a serious offence with severe consequences. In other cases, people more innocently omit other sources of income from their Self-Assessment tax return, such as:
All pay, bonuses, benefits, and tips from work as an employee (if applicable)
• Rental or holiday let income
• Savings interest
• Investment income
• Pensions and earnings from overseas
• State benefits, such as maternity/paternity pay.
Be sure to include all sources of taxable income in your Self-Assessment tax return.
How to avoid
Keep a clear and complete record of all income. Missing documents or details will lead to errors when completing your tax return. You could face penalties for providing inaccurate information or incur a higher tax bill than necessary. To avoid this, use a reliable tracking system for your earnings and ensure all are declared correct.
7.Missing supplementary pages
In some cases, HMRC requires more information to assess your circumstances for tax purposes, usually related to income that cannot be sufficiently explained within the main Self-Assessment tax return. For example, this might include a lump sum from an overseas pension scheme or property, or a life insurance payout. In such cases, supplementary pages must be filed with your Self-Assessment tax return.
How to avoid
Ensure you provide the correct supporting documents by checking the full list of supplementary pages and their requirements.
8.Failure to declare Notice of Coding
When your employment circumstances change, HMRC may amend your PAYE tax code, and you will receive a letter called a Notice of Coding explaining why your tax code has changed. This must be included in the Tax Adjustment section of your Self-Assessment tax return for the relevant year. However, many people miss this step, leading to complications, such as being charged twice—once through PAYE deductions and again through your tax return, making it more difficult to resolve with HMRC later.
How to avoid
Keep your Notice of Coding for your records. Ahead of tax season, create a checklist of all documents needed to file your tax return, including the Notice of Coding. Tick off sections as you work through the SA100 form to ensure nothing is missed.
9.Forgetting about benefits/tax-free allowances
As a business owner, you may be eligible for numerous benefits, and forgetting to declare them in your tax return is a significant error that could cause you to overpay tax. Some tax-free allowances include:
• Childcare benefits – Up to £4,000 per child
• Maternity pay – Up to £184.03 per week
• Marriage allowance – Transfer up to £1,260 of your personal allowance to your spouse or partner
• Rent a Room scheme – Up to £7,500 per tax year for letting out furnished accommodation in your home.
How to avoid
HMRC offers several benefits that business owners could be entitled to. Research which allowances you are eligible for and remember that tax-free allowances count as income and must be declared in your tax return.
Other mistakes to avoid in your Self-Assessment tax return
Other common errors to watch for during the tax return process include:
• Missing the Self-Assessment registration deadline (5th October)
• Missing the Self-Assessment tax return deadline (31st January)
• Ticking the wrong boxes on the form
• Not budgeting for the tax bill
• Failing to declare future business income (sole traders, unincorporated landlords, and business partnerships with an annual turnover of under £150,000 using cash-basis accounting must declare business income they have yet to receive at the time of submitting their tax return)
• Failing to declare interest received on bank accounts.
How to amend your tax return
If you have filed your tax return and made a mistake, you can correct it within 12 months of the Self-Assessment deadline. For example, you have until 31st January 2025 to make corrections to your tax return for 2024/25. Depending on the mistake, you may need to pay more tax or claim a refund if you have overpaid.
Why Choose Lanop Business and Tax Advisors for Self-Assessment and Tax Return?
Many reasons but the following are specific reasons that we differ from others.
At Lanop Consultancy, we get it—tax season can be a real hassle. That is why we are here to take the stress off your shoulders. Let us handle the details so you can focus on what you do best. Here are why our clients keep coming back to us:
Expertise You Can Trust
Our team is made up of experienced ACCA professionals who know the ins and outs of tax. We handle your self-assessment tax returns with care, making sure everything is spot on. We are up to date with all the latest tax rules and know how to get you the reliefs you are entitled to.
Thorough Review by Our Tax Director
Every tax return we handle goes through a careful review by our Tax Director. This extra check helps ensure that everything is accurate and meets all the standards. With this level of scrutiny, you can be sure that your finances are in good hands.
Always Here for You
We understand that you might have questions or need updates along the way. That is why we pride ourselves on being responsive. Whether you need advice or just want to check in, we are always ready to help.
Personalized Service
Your tax situation is unique, and we treat it that way. We tailor our services to fit your specific needs, whether you are running a business, renting out property, or juggling multiple income streams. Our advice is customized just for you.
Easy and Stress-Free Filing
From gathering your documents to submitting your return, we handle it all. You do not have to worry about the paperwork—we have gotten it covered, making the entire process smooth and straightforward for you.
Keeping Deadlines in Check
We know that missing deadlines can be costly. That is why we make sure your tax return is filed on time. We stay ahead of all deadlines and take care of everything well in advance so you can avoid any late penalties.
Dedicated Support
You will have your own dedicated accountant who will work with you personally. This means clear communication and a familiar face to guide you through the process. We are here to make sure all your questions are answered.
Finding Savings
Our team is always on the lookout for ways to save you money. We identify all deductions and reliefs you can claim, helping you reduce your tax bill and keep more of your hard-earned cash.
Transparent Pricing
We believe in keeping things clear and simple. Our pricing is straightforward with no hidden fees. You will know exactly what you are paying for, and we offer excellent value with our top-notch service.
Keeping Your Information Safe
Your privacy is a top priority for us. We use the latest security measures to keep your personal and financial information safe and secure.
Planning for the Future
We do not just file your return—we help you plan. Our proactive advice helps you make informed decisions for your financial future, whether you are self-employed or managing multiple income streams.
Success Stories
We are proud of the positive outcomes we have achieved for our clients. Our careful approach and deep understanding of tax laws help individuals and businesses succeed. Your success is our success.
Always Improving
We are dedicated to staying on top of the latest tax standards and practices. This commitment helps us offer the best solutions and the highest quality of service. We are always learning and improving to better serve you.
