Common Self Assessment Mistakes to Avoid

/Published:9th January 2026/inContractors, Expenses, Freelancers, Making Tax Digital, Running a business, Self Employed, Tax
Accounting Wise - common self assessment mistakes to avoid

Get 50% off our services for the first 6 months when you sign up to one of our Pre-Built or Bespoke Packages!

Self Assessment is rarely difficult because the maths is complex. For most UK taxpayers, it’s difficult because it’s fiddly. There are lots of small rules to remember, strict deadlines that don’t bend, and a handful of traps that only tend to appear when you’re already busy, stressed, or short on cash in January.

Every year, HMRC issues millions of late filing penalties and interest charges, many of which could have been avoided with a bit of forward planning and a clearer understanding of how Self Assessment actually works. In fact, HMRC’s own guidance confirms that most errors come from missed deadlines, incorrect figures, or misunderstandings around what income needs to be declared rather than deliberate non-compliance.

This guide breaks down the most common Self Assessment mistakes UK taxpayers make, explains what they can cost you in penalties, interest, or lost tax relief, and shows you how to avoid them. It’s written specifically for:

  • Sole traders and freelancers
  • Landlords with rental income
  • Company directors with dividends or untaxed income
  • Anyone earning side income alongside PAYE employment

We’ve also included practical tips used by professional accountants, links to official HMRC resources, and simple checks you can run before submitting your return. Whether you complete your own tax return or use an accountant, understanding these common mistakes will help you stay compliant, reduce stress, and avoid paying more tax than you need to.

For reference, HMRC’s official overview of who needs to file a return can be found here:
https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

If you’re filing for the first time or returning after a gap, many of these issues are especially easy to miss, which is why getting the basics right early makes a significant difference later on.

The deadline basics (where most problems start)

If there’s one area where Self Assessment regularly goes wrong, it’s deadlines. Get these wrong and everything else becomes more stressful, more expensive, and harder to fix. HMRC operates a strict, automated penalty system, which means missing a deadline almost always triggers a fine, even if you don’t owe any tax.

Here are the key dates every UK Self Assessment taxpayer needs to understand.

Registering for Self Assessment (first-time filers)

If you’re filing a Self Assessment tax return for the first time, you must register with HMRC by 5 October following the end of the tax year you need to report.

Failing to register on time can lead to penalties and makes it harder to file accurately because you won’t receive your Unique Taxpayer Reference (UTR) in time.

Official HMRC guidance on registering can be found here: https://www.gov.uk/register-for-self-assessment

Paper tax return deadline

If you still submit a paper tax return, the deadline is usually 31 October following the end of the tax year.

Paper filing is now relatively rare and leaves less room for error or delay. Miss this deadline and you’ll automatically need to file online instead, assuming you still have time to do so.

HMRC paper filing deadlines are explained here: https://www.gov.uk/self-assessment-tax-returns/deadlines

Online tax return deadline

For most people, the key date is 31 January. This is the deadline for submitting your online Self Assessment tax return.

Miss this deadline and HMRC will issue an immediate £100 late filing penalty, even if:

  • You don’t owe any tax
  • You’re due a refund
  • You plan to pay the tax shortly afterwards

Penalties increase the longer the return remains outstanding, which is why filing on time matters even if payment is difficult.

Payment deadlines

In most cases, tax payments are due on:

  • 31 January – your balancing payment for the previous tax year, plus your first payment on account (if applicable)
  • 31 July – your second payment on account

Payments on account apply to many sole traders, landlords, and others with untaxed income. They regularly catch people out because they effectively require paying tax in advance for the current year.

HMRC’s guidance on payment deadlines and payments on account can be found here: https://www.gov.uk/understand-self-assessment-bill/payments-on-account

Why missing deadlines is so costly

Miss the filing deadline and penalties apply even if no tax is due. Miss the payment deadline and interest is added daily until the balance is cleared. Leave it long enough and additional late payment penalties can apply on top.

Practical tip: experienced accountants rarely wait until January. Filing early gives you time to spot errors, plan for payments, and arrange a Time to Pay agreement with HMRC if cash flow is tight.

1) Registering too late (or assuming HMRC will “tell you”)

The mistake

You have income that isn’t fully taxed through PAYE, such as self-employment profits, rental income, dividends, or side income, and assume HMRC will automatically contact you and tell you what to do.

This is one of the most common first-time Self Assessment errors. HMRC does not proactively monitor your bank account or notify you just because you start earning untaxed income. The responsibility to register sits entirely with you.

Why it hurts

If you fail to register for Self Assessment on time, HMRC can charge penalties for late notification, even if you intended to file and pay eventually. Late registration also causes practical problems, including:

  • Delays receiving your Unique Taxpayer Reference (UTR)
  • Problems setting up an online Government Gateway account
  • Being forced into a rushed January filing
  • Less time to budget for the tax bill

In busy periods, UTRs can take several weeks to arrive, which means leaving registration too late can make it impossible to file by the deadline without stress or risk.

How to avoid it

If it’s your first time needing to complete a Self Assessment tax return, register with HMRC as soon as you know you have untaxed income.

You must normally register by 5 October following the end of the tax year in which the income was earned, but there’s no benefit to waiting until that date. Earlier registration gives you time to:

  • Receive your UTR
  • Set up online filing access
  • Understand what income needs declaring
  • Plan for any tax due

HMRC’s official registration guidance is available here: https://www.gov.uk/register-for-self-assessment

Practical tip: if you’ve had untaxed income for more than one tax year and haven’t registered yet, it’s usually better to come forward voluntarily. HMRC is generally more lenient where taxpayers disclose errors themselves rather than waiting to be chased.

2) Missing income sources that don’t feel like “income”

The mistake

Many people only report their “main” source of income, such as self-employment profits, and accidentally overlook smaller or irregular income streams. This usually isn’t deliberate. It happens because certain types of income don’t feel like earnings in the traditional sense, especially if the money arrives sporadically or through different platforms.

From HMRC’s perspective, if it’s taxable and not fully dealt with through PAYE, it generally needs to be declared.

Common income sources people miss

  • Rental income, including occasional lets, lodger income, or short-term property rentals
  • Dividends from shares or funds outside tax-free allowances
  • Savings interest from bank accounts and building societies
  • Freelance or contract work done alongside employment
  • Overseas income, even if tax was paid abroad
  • Capital gains, including disposals of shares, crypto assets, or property

With the rise of side hustles, investment apps, and digital platforms, this mistake has become more common. HMRC increasingly receives data directly from banks, platforms, and overseas tax authorities, which means omissions are easier for them to spot after the fact.

Why it hurts

Missing income can result in:

  • HMRC enquiries or compliance checks
  • Backdated tax bills with interest
  • Penalties based on the perceived behaviour behind the error
  • Stress and time spent correcting past returns

Even small amounts can cause problems if HMRC believes the omission was careless or repeated.

How to avoid it

Before you start your tax return, build a simple “income sweep” list and use it as a checklist.

A good approach is to review:

  • Your bank statements for the full tax year
  • Dividend and interest statements from investment platforms
  • Rental income records and letting agent statements
  • Crypto and share trading histories
  • Any overseas income summaries

HMRC’s guidance on what income needs to be declared is available here: https://www.gov.uk/income-tax

For capital gains specifically, HMRC provides detailed guidance here: https://www.gov.uk/capital-gains-tax

Practical tip: if you’re unsure whether something counts as taxable income, make a note of it anyway and check. It’s far easier to include something unnecessarily and remove it than to explain why it was left out later.

3) Mixing personal and business transactions (then guessing)

The mistake

Using one bank account for everything and then trying to separate business and personal transactions at the end of the tax year. When January arrives, many people end up scrolling through statements and relying on memory to decide what was business-related and what wasn’t.

This approach almost always leads to errors, even with the best intentions.

Why it hurts

When personal and business spending is mixed together, one of two things usually happens:

  • You underclaim allowable expenses and overpay tax because you’re unsure what you can safely include
  • You overclaim expenses that aren’t wholly and exclusively for business, increasing the risk of an HMRC enquiry and penalties

HMRC expects business records to be clear, accurate, and supported by evidence. Guessing, rounding figures, or using estimates without a reasonable basis can be flagged during a compliance check.

HMRC’s record-keeping requirements are outlined here: https://www.gov.uk/self-employed-records

How to avoid it

The simplest way to avoid this mistake is to separate your finances as early as possible.

  • Use a dedicated business bank account, even if you’re a sole trader. This creates a clear audit trail and makes your records far easier to manage.
  • Run a monthly mini-reconciliation. Spend 20 minutes each month labelling key transactions while they’re still fresh in your mind.

If you use accounting software, regular reviews also help spot missing income, duplicated expenses, or unusual transactions long before the tax return is due.

Practical tip: many business bank accounts now integrate directly with accounting software, automatically categorising transactions and attaching digital records. This not only saves time but significantly reduces the risk of errors at year end.

4) Claiming expenses that aren’t “wholly and exclusively” for business

The mistake

Claiming personal costs as business expenses simply because they are loosely connected to work. This often includes everyday clothing, normal commuting costs, or household bills claimed in full without any business-use calculation.

HMRC’s rule is clear: for an expense to be allowable, it must be incurred wholly and exclusively for business purposes. If there is a personal element, you usually need to apportion the cost or exclude it entirely.

Why it hurts

Overclaiming expenses is one of the most common triggers for HMRC enquiries. If HMRC decides an expense was not allowable, they can:

  • Disallow the expense and increase your tax bill
  • Charge interest on the underpaid tax
  • Apply penalties if the claim is considered careless or deliberate

Even where the amounts are relatively small, repeated incorrect claims can raise red flags.

Common examples that cause problems

  • Everyday clothing that is suitable for normal wear
  • Normal commuting between home and a regular place of work
  • Personal mobile phone or broadband bills claimed in full
  • Meals that are not part of qualifying business travel

How to avoid it

Stick to clearly allowable expense categories and keep evidence to support your claims.

Where an expense has both personal and business use, only claim the business portion and ensure the basis of your calculation is reasonable and consistent.

HMRC’s official overview of allowable expenses is an essential reference point: https://www.gov.uk/expenses-if-youre-self-employed

Practical tip: if you’re unsure whether an expense is allowable, assume HMRC will ask you to justify it. If you can’t clearly explain why it is wholly and exclusively for business, it’s usually safer not to claim it or to seek professional advice first.

5) Underclaiming expenses (paying more tax than you need to)

The mistake

While overclaiming gets more attention, underclaiming expenses is just as common. Many taxpayers go too cautious, forget legitimate costs, or leave expenses out altogether because they’re unsure what’s allowed.

The result is simple: you end up paying more tax than you legally need to.

Expenses that are often missed

  • Software subscriptions used for business, such as accounting, design, CRM, or productivity tools
  • Business use of phone and internet, where a reasonable proportion can be claimed
  • Professional fees, including accountants, bookkeepers, business insurance, and legal advice
  • Use of home as an office, where household costs can be apportioned
  • Mileage or vehicle costs, where travel is wholly for business purposes

These costs can add up significantly over a tax year, particularly for freelancers, consultants, and home-based businesses.

Why it hurts

Underclaiming expenses inflates your taxable profit, which can push you into a higher tax band, increase National Insurance contributions, and affect payments on account for the following year.

Once a return is filed, correcting missed expenses usually means amending the return or waiting for the next tax year, both of which take time and effort.

How to avoid it

Review your expenses methodically and make sure you’re claiming everything you’re entitled to.

If calculating exact proportions feels complicated, consider using HMRC’s simplified expenses. These flat-rate methods cover areas such as:

  • Use of home for business
  • Business mileage
  • Business use of vehicles

Simplified expenses can be easier to manage and still provide a fair deduction, particularly for smaller or straightforward businesses.

HMRC’s guidance on simplified expenses is available here: https://www.gov.uk/simplified-expenses

Practical tip: keep a running list of regular business costs throughout the year. Reviewing this list monthly helps ensure nothing is forgotten when it comes to completing your tax return.

Stress-Free Self Assessment Tax Returns

 Self Assessment Tax Returns

Categories:

Get 50% off our services for the first 6 months when you sign up to one of our Pre-Built or Bespoke Packages!

Speak to an accounting expert

If you’re unsure what level of support you need, our friendly team are on hand to help you pick the right package for you.

0330 113 8442 Request Call Back

6) Forgetting payments on account (the “why is my bill so high?” shock)

The mistake

Budgeting only for the tax you owe for the year just ended, then being caught out when HMRC also asks for advance payments towards the next tax year. This often leads to a January shock, where the bill feels far higher than expected.

Payments on account are one of the most misunderstood parts of Self Assessment and regularly cause cash flow problems for sole traders, landlords, and company directors with untaxed income.

What you need to know

Payments on account are advance payments towards your next tax bill. They are usually required if your last Self Assessment tax bill was over £1,000 and less than 80% of your tax was collected at source.

They are normally due in two instalments:

  • 31 January – first payment on account
  • 31 July – second payment on account

Each payment is typically based on half of the previous year’s tax bill, excluding Capital Gains Tax.

HMRC’s explanation of how payments on account work is available here: https://www.gov.uk/understand-self-assessment-bill/payments-on-account

Why it catches people out

When you receive your tax calculation, the amount due in January can include three separate elements:

  • Balancing payment – the remaining tax owed for the year just ended
  • First payment on account – advance tax towards the current tax year
  • Second payment on account – due the following 31 July

If you’re not expecting this, it can feel like your tax bill has doubled overnight, even though part of the payment relates to future income.

How to avoid the shock

As soon as your tax calculation is available, review it carefully and identify each element of the bill rather than focusing only on the total figure.

If your income has dropped significantly and you expect your next tax bill to be lower, you may be able to apply to reduce your payments on account. However, this should be done carefully.

If you reduce payments too far and your income does not fall as expected, HMRC can charge interest and penalties on the underpaid amount.

Practical tip: if your income is variable, set aside money throughout the year based on your worst-case tax scenario. This makes payments on account far easier to manage and avoids last-minute panic.

7) Filing on time but paying late (penalties and interest still bite)

The mistake

Submitting your Self Assessment tax return by 31 January but failing to pay the tax due by the same deadline. Many people assume that filing on time is enough to avoid penalties, but HMRC treats filing and payment as two separate obligations.

Why it hurts

If you pay late, HMRC charges interest on the outstanding balance from the day after the deadline until the tax is paid in full. The interest rate is variable and can change over time, meaning the longer a balance remains unpaid, the more it costs.

In addition to interest, late payment penalties can apply if the tax remains unpaid for:

  • 30 days
  • 6 months
  • 12 months

These penalties are calculated as a percentage of the unpaid tax, which means larger balances can become expensive very quickly.

HMRC publishes the current late payment interest rate here: https://www.gov.uk/interest-rates-for-late-and-early-payments

How to avoid it

If cash flow is tight, the worst thing you can do is ignore the payment deadline. HMRC is generally more flexible when you engage early rather than after penalties have already been applied.

Legitimate options may include:

  • Setting aside tax regularly throughout the year
  • Paying as much as you can by the deadline to reduce interest
  • Applying for a Time to Pay arrangement where eligible

Time to Pay allows you to spread tax payments over an agreed period, helping manage cash flow without escalating enforcement action.

HMRC’s guidance on paying your Self Assessment tax bill and exploring payment options is available here: https://www.gov.uk/pay-self-assessment-tax-bill

Practical tip: even if you can’t pay the full amount, filing on time and paying something is always better than doing nothing. It shows willingness to comply and reduces both interest and the risk of further penalties.

8) Not keeping records long enough (or losing evidence)

The mistake

Throwing away receipts, losing invoices, or failing to keep digital records once the tax return has been submitted. Many people assume that once HMRC has accepted a return, the paperwork is no longer needed.

In reality, HMRC can ask to see evidence well after a return is filed.

Why it hurts

If HMRC opens an enquiry and you can’t produce supporting records, they may:

  • Disallow expenses or income figures they can’t verify
  • Estimate your tax liability instead
  • Charge additional tax, interest, and penalties

Even where your figures are correct, a lack of evidence makes it harder to defend them.

How long you need to keep records

As a general rule, if you’re self-employed or submitting a Self Assessment return, you should keep your records for at least 5 years after the 31 January submission deadline for the relevant tax year.

For example, for the 2023–24 tax year with a filing deadline of 31 January 2025, records should be kept until at least 31 January 2030.

HMRC’s official record-keeping guidance is available here: https://www.gov.uk/self-employed-records

How to avoid it

Store all tax-related records in one organised place so they are easy to access if needed.

  • Use a dedicated cloud folder for each tax year
  • Scan or photograph paper receipts and invoices
  • Keep digital copies of bank statements and reports

If HMRC ever asks for information, speed and clarity matter. Being able to respond quickly with clear records can make the difference between a straightforward check and a prolonged enquiry.

Practical tip: label files clearly with dates and descriptions. Future you will be very grateful when you don’t have to decipher “receipt123.jpg” several years later.

9) Relying on estimates without marking them properly

The mistake

Using rough or estimated figures on your tax return because some information is missing, then forgetting to correct them later. This often happens where statements arrive late, figures are hard to pin down, or records aren’t fully up to date by January.

While HMRC does allow estimates in limited circumstances, they expect them to be used carefully and transparently.

Why it hurts

Uncorrected estimates can result in:

  • Paying the wrong amount of tax
  • Follow-up queries from HMRC
  • The need to amend returns after submission
  • Potential penalties if figures are materially wrong

If HMRC later receives accurate data from banks, platforms, or third parties that doesn’t match your estimates, this can trigger questions.

How to avoid it

Wherever possible, aim to file your return using final, confirmed figures. Filing early gives you more time to chase missing information and reduces the pressure to guess.

If you genuinely have to use estimates:

  • Make sure the estimate is reasonable and based on available evidence
  • Keep a clear record of what figures were estimated and why
  • Update the return once the final numbers are available

HMRC allows amendments to online Self Assessment returns within 12 months of the filing deadline, which gives you time to correct estimates if needed.

HMRC’s guidance on amending a tax return can be found here: https://www.gov.uk/self-assessment-tax-returns/corrections

Practical tip: keep a simple checklist of any estimated figures used and set a calendar reminder to review them. This prevents estimates becoming permanent by accident.

10) Not checking for obvious “human errors”

The mistake

Simple typos and mis-entries are one of the easiest ways to end up with an incorrect tax return. These errors are rarely intentional, but they can still cause problems if they materially affect your tax calculation.

Common examples include:

  • Missing or adding an extra digit to income figures
  • Entering expenses in the wrong section of the return
  • Duplicating income or expense entries
  • Using incorrect National Insurance figures

Why it hurts

Even small input errors can significantly change the tax due. HMRC’s systems perform basic sense checks, but they won’t catch everything. If figures don’t add up logically, this can lead to:

  • Incorrect tax bills
  • Follow-up queries from HMRC
  • The need to amend returns later
  • Unnecessary stress and wasted time

How to avoid it

Before submitting your return, do a final “sanity pass” rather than rushing to hit submit.

Useful checks include:

  • Compare this year’s totals to last year’s and investigate any large swings
  • Cross-check turnover against bank inflows and issued invoices
  • Review expense totals to make sure nothing has been duplicated or missed
  • Confirm the return reflects your actual business structure, such as sole trader, partnership, or company-related income

Taking a few extra minutes at this stage can prevent hours of work later correcting avoidable mistakes.

Practical tip: if possible, step away from the return for a few hours or overnight before submitting it. A fresh pair of eyes, even your own, is far more likely to spot obvious errors.

11) Forgetting you can amend the return (and panicking instead)

The mistake

Assuming that once a Self Assessment tax return has been submitted, it’s final and can’t be changed. This often leads to unnecessary panic when a mistake is spotted after filing.

In reality, HMRC expects errors to happen occasionally and provides a formal process for correcting them.

The good news

In most cases, you can amend an online Self Assessment tax return within 12 months of the 31 January filing deadline for the relevant tax year.

HMRC’s guidance on making corrections is available here: https://www.gov.uk/self-assessment-tax-returns/corrections

How to avoid unnecessary stress

If you notice a mistake after filing, act quickly rather than ignoring it. Prompt corrections reduce the risk of interest, penalties, or HMRC queries later on.

Where possible:

  • Amend the return online through your HMRC account
  • Update any affected figures accurately
  • Keep clear notes on what was changed and why

If the amendment affects the tax due, HMRC will automatically recalculate your bill. Any additional tax should be paid as soon as possible to limit interest.

Practical tip: correcting a genuine mistake is almost always viewed more favourably than leaving it unaddressed. HMRC is far more concerned about repeated or ignored errors than honest corrections.

12) Paying the wrong way (or missing easier options)

The mistake

Leaving payment until the last minute and then discovering your chosen payment method takes longer to process, or simply not realising there are easier or more suitable ways to pay your Self Assessment bill.

Late payment is often caused by timing and method issues rather than a lack of funds.

Why it causes problems

Different payment methods have different processing times. Bank transfers, online banking cut-offs, and card payments can all affect when HMRC actually receives the money.

If payment arrives after the deadline, interest and penalties can apply, even if you initiated the payment on time.

Payment options you may not realise you have

Depending on your circumstances, HMRC offers several ways to pay your Self Assessment tax bill, including:

  • Online or telephone banking
  • Debit card payments
  • Direct Debit (where set up in advance)
  • Paying through your PAYE tax code, in certain cases

Paying through your tax code can be an option if you meet specific conditions, such as owing below HMRC’s threshold and filing your return by the required date. This allows the tax to be collected gradually from your wages or pension.

HMRC’s guidance on paying through your tax code and other payment methods is available here: https://www.gov.uk/pay-self-assessment-tax-bill

How to avoid it

Decide how you plan to pay well before late January and allow for processing times.

  • Check bank transfer cut-off times
  • Set up Direct Debit early if you intend to use it
  • Confirm whether paying through your tax code is available to you

Practical tip: once your return is filed, log into your HMRC account and review the payment options shown there. Choosing the right method early removes unnecessary risk and avoids last-minute stress.

Quick “mistake-proof” Self Assessment workflow

One of the easiest ways to avoid most Self Assessment problems is to spread the work across the year rather than compressing everything into January. The workflow below mirrors how many accountants manage returns behind the scenes and helps reduce errors, stress, and last-minute surprises.

  1. Early October
    Confirm whether you need to register for Self Assessment if this is your first year. This gives you time to receive your UTR and set up online access without pressure.
    https://www.gov.uk/register-for-self-assessment
  2. Monthly (all year)
    Label transactions and store receipts as you go. A quick monthly review keeps records accurate and avoids relying on memory later.
  3. April to June
    Pull reports and statements from banks, bookkeeping software, rental platforms, and investment accounts while the tax year is still fresh.
  4. Summer
    Create a rough tax estimate and start building a dedicated tax pot. This makes payments on account far easier to manage when they arrive.
  5. Autumn
    Draft your tax return and chase any missing documents early. This is also a good time to review expenses and check for anything you may have missed.
  6. December
    Finalise the return, double-check payments on account, and decide how you’ll pay your tax. Planning your payment method early avoids late payment issues in January.
    https://www.gov.uk/pay-self-assessment-tax-bill

Following a simple, repeatable process like this removes most of the common mistakes long before HMRC deadlines come into play.

Official HMRC resources worth bookmarking

HMRC guidance is often detailed and technical, but these pages are particularly useful reference points if you complete your own Self Assessment or want to double-check something quickly. Bookmarking them can save time, stress, and unnecessary mistakes.

Using official HMRC guidance alongside professional advice gives you the best chance of getting your Self Assessment right the first time.

Final thoughts on getting Self Assessment right without the stress

Most Self Assessment problems don’t come from complex tax planning or advanced calculations. They come from small, avoidable mistakes made under time pressure, missing information, or simple misunderstandings of how the system works.

By understanding the common pitfalls and putting a few basic processes in place, you can dramatically reduce the risk of penalties, interest, and overpaying tax. Registering early, keeping clean records, reviewing income properly, and planning for payments all make Self Assessment far more manageable.

If there’s one takeaway, it’s this: Self Assessment works best when it’s treated as a year-round task, not a January emergency. Spreading the workload gives you time to spot issues, ask questions, and make informed decisions rather than rushed guesses.

And if something does go wrong, remember that many mistakes can be corrected. HMRC allows amendments, offers structured payment options, and generally responds better when issues are dealt with promptly rather than ignored.

For those with multiple income streams, complex expenses, or changing circumstances, professional advice can often pay for itself by reducing errors and ensuring you’re not paying more tax than necessary.

Handled properly, Self Assessment doesn’t have to be stressful. With the right preparation and awareness of these common mistakes, it becomes a routine compliance task rather than a source of last-minute panic.

Need help with your accounts as Freelancer? Contact Accounting Wise Today!

Build Your Own Package Accounting Packages One Off Pricing

Common Self Assessment Mistakes FAQ

0330 113 8442 Request Call Back

You may still need to file a Self Assessment return even if you’re employed under PAYE. This often applies if you have additional income such as freelance work, rental income, dividends, overseas income, or capital gains. HMRC sets specific criteria for who must file each year.

If you miss the filing deadline, HMRC usually issues an automatic £100 late filing penalty, even if you don’t owe any tax. Further penalties and interest can apply the longer the return or payment remains outstanding.

Yes. You can usually file your online Self Assessment return shortly after the end of the tax year on 5 April. Filing early gives you more time to plan for payments and reduces the risk of last-minute errors.

Most online Self Assessment returns can be amended within 12 months of the 31 January filing deadline. If you spot an error, it’s best to correct it as soon as possible to reduce the risk of interest or penalties.

You should keep evidence to support all expenses claimed on your tax return. This can include receipts, invoices, bank statements, or digital records. HMRC may ask to see this evidence if they carry out a compliance check.

Payments on account are advance payments towards your next tax bill and are usually required if your previous Self Assessment bill was over £1,000 and not mostly collected through PAYE. They are typically due on 31 January and 31 July.

If you’re self-employed or submitting a Self Assessment return, records should generally be kept for at least five years after the 31 January submission deadline for the relevant tax year.

Using an accountant isn’t mandatory, but it can be helpful if you have multiple income streams, complex expenses, or limited time. Professional advice can also help ensure you’re claiming everything you’re entitled to while staying compliant with HMRC rules.

Glossary of key Self Assessment and tax terms

Understanding the language used in Self Assessment can make the process far less intimidating. Below is a plain-English glossary of common terms that regularly come up when completing a UK tax return, especially for freelancers, sole traders, landlords, and those with side income.

Self Assessment – HMRC’s system for reporting income that isn’t fully taxed through PAYE, such as self-employment, rental income, dividends, or side hustles.

UTR (Unique Taxpayer Reference) – A 10-digit reference number issued by HMRC once you register for Self Assessment. You need this to file your tax return.

Tax Year – Runs from 6 April to 5 April the following year. Your Self Assessment return reports income earned during this period.

Balancing Payment – The remaining tax you owe for a tax year after taking into account any tax already paid.

Payments on Account – Advance payments towards your next tax bill, usually due on 31 January and 31 July, based on the previous year’s tax.

Allowable Expenses – Business costs that can be deducted from your income to reduce taxable profit, provided they are wholly and exclusively for business purposes.

Simplified Expenses – HMRC flat-rate methods for claiming certain costs such as home working or mileage, instead of calculating exact proportions.

Wholly and Exclusively – HMRC’s rule that an expense must be incurred purely for business purposes to be fully allowable.

Capital Gains Tax (CGT) – Tax paid on the profit made when you sell or dispose of assets such as shares, crypto assets, or property.

Personal Allowance – The amount of income you can earn each tax year before paying Income Tax, subject to income limits.

National Insurance Contributions (NICs) – Contributions paid by self-employed individuals, usually Class 2 and Class 4 NICs, based on profits.

Time to Pay Arrangement – An agreement with HMRC that allows you to spread tax payments over time if you can’t pay in full by the deadline.

Late Filing Penalty – A fixed penalty (usually £100) charged for submitting your tax return after the filing deadline, even if no tax is due.

Late Payment Interest – Interest charged by HMRC on unpaid tax from the day after the payment deadline until the balance is cleared.

Amended Return – A corrected version of a submitted tax return. Most online Self Assessment returns can be amended within 12 months of the filing deadline.

Making Tax Digital (MTD) – HMRC’s programme requiring businesses to keep digital records and submit tax information using compatible software.

HMRC – His Majesty’s Revenue and Customs, the UK government department responsible for collecting taxes and administering Self Assessment.

Practical tip: bookmarking or revisiting this glossary while completing your tax return can help reduce confusion and prevent small misunderstandings from turning into costly mistakes.

Newsletter Subscription - Accounting Wise

Join Our Newsletter!

Get expert accounting tips, tax updates, and business insights straight to your inbox. Sign up today and stay one step ahead!

Newsletter Signup

Hot Topics

More related Accounting Community, News & Resources

Accounting Wise - What is Double Entry Bookkeeping

What is Double Entry Bookkeeping

Double entry bookkeeping is the foundation of proper business accounting. This guide explains how debits and credits work, why double entry matters in the UK, and how it helps you produce accurate accounts, spot errors early, and stay compliant with HMRC requirements.
Accounting Wise - Self Assessment Checklist

Self Assessment Checklist

A practical Self Assessment checklist for UK taxpayers. From confirming whether you need to file to claiming expenses, avoiding penalties, and staying organised year-round, this guide walks you through Self Assessment step by step - without the stress.
Accounting Wise - How To Choose the Right Accountant

How To Choose the Right Accountant

Choosing the right accountant can transform your business. This guide walks you through what to look for, the questions to ask, typical UK pricing, and how to avoid costly mistakes so you can confidently select the best accounting partner for your needs.
Online Company Formation Experts - Formations Wise
Right Right Company Formation

Company Formation

Free company formation with our Pre-Built or Bespoke Accounting packages!

All Official Documents

Manage Your Company Online

London Registered Office Address

Your own limited company

Accounting Software

Whatever your size, our accounting software supports your business.

Quotes & Payment Reminders

MTD VAT & CIS Returns

Payroll Services & HR Support

Unlimited Support & Advice

Balance Accounting Software - The Balance App
Right Right Accounting Software
Rated Excellent on Trust Pilot - Accounting Wise Logo

Get started with the right accounting solution for your business

Build Your Own PackageAccounting PackagesOne Off Pricing

Contact Us

Interested in Accounting Wise?

Request Call Back0330 113 8442

Accounting Wise is a trading style of Accounting Wise Ltd, a limited company registered in England under company number 09365202. Our registered office is: The Carriages, Station Road, Ware, SG12 9PL UK.

Content is for general information only. Always take advice.

What is Double Entry BookkeepingAccounting Wise - What is Double Entry Bookkeeping