It’s always nerve-wracking to receive a communication from HMRC about a penalty you have to pay or a higher tax bill than you anticipated. The thing that makes it worse? Realising that you were only charged the extra amount because of a Self Assessment mistake you made while filing your returns.
Navigating the complexities of Self Assessment tax returns on your own can be stressful — but luckily, it’s a lot easier than you think. In this guide, we’ll share practical tips on how to avoid some of the most common mistakes made on Self Assessment tax returns.
Common Self Assessment mistakes (and how to avoid them)
1. Incorrect UTR or NI Number
Your Unique Taxpayer Reference (UTR) and National Insurance (NI) number are what HMRC uses to identify you when you submit your Self Assessment tax return. If you enter these incorrectly, you run the risk of processing delays, processing errors, and even tax penalties. You receive your 10-digit UTR by post when you sign up for Self Assessment. This can take up to three or four weeks, so be sure to do it well in advance to avoid a late filing penalty for Self Assessment. If you forget your UTR, you can find it in your online account or on the HMRC app.
2. Missing supplementary pages
Supplementary pages on your Self Assessment tax return provide additional details on specific income sources. The pages you’re most likely to need are Self-Employment Income (SA103), Property Income (SA109), and Capital Gains (CGT). Be sure to complete and attach all relevant supplementary pages to your tax return to avoid processing delays or inquiries from HMRC.
3. Forgetting tax-free allowances
Did you know that there are several tax-free allowances you can apply for to reduce your tax bill? There’s the Personal Allowance, the Capital Gains Tax Allowance, and the Trading Allowance (if you’re a sole trader). Check out the HMRC website for the full list of allowances and see which ones you’re available for. If you’re unsure, your accountant can help you out.
4. Failing to declare all income sources
This is perhaps the most common Self Assessment mistake that we see. HMRC requires you to declare all sources of income, even if you haven’t received a tax form for them. Typically, this includes rental income, overseas income, and self-employment income in addition to your salaried income. We recommend keeping full records of all income you receive at any point so you can accurately complete your Self Assessment tax return. And if you become aware of income that you need to declare, write to HMRC and revise it within 12 months of the self assessment deadline.
Remember too that since the introduction of The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023, which came into force at the beginning of 2024, eBay and other UK digital marketplaces including Airbnb, are required to report a user’s sales if they are over clearly defined thresholds to HMRC. So don’t forget to check the thresholds to see whether you need to include this income too.
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5. No Government Gateway user ID
Your Government Gateway user ID is what allows you to access your online Self Assessment account and submit your tax return electronically. We recommend registering for this well in advance of the tax deadline to avoid a fine for missing the Self Assessment deadline. If you aren’t able to file online, HMRC allows you to file paper records. However, these can lead to significant delays, so we don’t recommend this.
6. Missing the tax deadline
Perhaps the most common Self Assessment mistake is failure to meet the Self Assessment tax return deadline (31st October for postal return(usually s or 31st January for online returns). HMRC will typically charge you interest based on how many days or weeks late you submit your returns — and if you delay too much, you could attract hefty penalties. To avoid this, we highly recommend gathering all your tax documents well in advance of the deadline and hiring an accountant to help with Selfyou meet the Self Assessment deadline.
7. Not keeping complete records
A prerequisite for submitting accurate Self Assessment tax returns is having a full record of all your expenses and income throughout the tax year. We recommend investing in a digital record-keeping software so that all your receipts, invoices, bank statements, and business mileage logs are accessible in a single place. HMRC, in fact, requires you to maintain records for at least five years from 31st January of the relevant tax year.
8. Not declaring correct salary and benefits from PAYE jobs
Did you know that individuals with PAYE income may need to submit a Self Assessment return too? This usually applies if you have other taxable income sources or if you exceed a certain income threshold.
If you do need to submit a Self Assessment return as a PAYE job holder, be sure to accurately mention your salary and benefits from the PAYE job too. You can ask your employer for a P60 form to help you out with this. Incorrect reporting of PAYE income could lead to tax overpayments or underpayments, so be careful with this part.
9. Forgetting about payments on account
Payments on account are advance payments towards your future tax liability for the year. After you file your Self Assessment tax return, you make two payments on account, each for half of the tax bill from the previous year. An all-too-common self assessment mistake we see is individuals forgetting about making these payments on 31st January and 31st July, thereby attracting hefty fines from HMRC.
Final words
Most of the time, individuals face inquiries or penalties on their Self Assessment tax returns because of avoidable mistakes like incorrect ID information, failure to report all sources of income, and incomplete records of income and expenses. By planning your tax return carefully and thoroughly reviewing your Self Assessment return before submitting it, you can avoid getting your Self Assessment calculation wrong and rest easy about HMRC communications.
And if you need extra help with your Self Assessment tax return, why not hire a professional to do your returns for you? At Bradley’s Accountants, we understand how frustrating it can be to manage returns on your own and specialise in offering efficient, affordable support. Reach out today to know more about us.
