Six Common Self Assessment Mistakes and How to Avoid Them

The deadline Self Assessment tax returns is often a rush for many – in 2021/22 of the 11.7 million taxpayers, a staggering 800,000 filed on the final day, January 31, 2023, with 36,000 submissions in the last hour.

However, hurrying can lead to errors. Each year, taxpayers discover mistakes in their returns, some minor, others serious enough to attract fines or, in extreme cases, legal action for tax evasion. Understanding where other self employed workers often trip up can help you file accurately.

Incorrect UTR or NI Number

Your Unique Taxpayer Reference (UTR) and National Insurance (NI) number are crucial identifiers. Errors here can complicate your filing. These numbers are available in your Personal Tax Account, previous tax returns, or HMRC correspondence. Double-check these numbers for accuracy and take your time when entering them into your tax return.

Not Reporting All Taxable Income

All sources of income must be declared on your Self Assessment tax return. This includes not just your business income but also:

• wages from employment (UK or overseas)
• tips and commission payments
• rental income (UK or overseas)
• savings interest
• share dividend payments
• pension payments (UK and overseas)
• state benefits (eg maternity pay)
• capital gains made from selling taxable assets.

Omitting any of these can result in underpayment of Income Tax and National Insurance contributions. If unsure, contact HMRC for guidance.

Missing Supplementary Pages

Different income sources require separate supplementary pages along with the main tax return (SA100). For example, the self employed use the SA103, while rental income or capital gains have their dedicated forms (SA105 and SA108, respectively).

Visit Gov.uk for the complete list of supplementary pages relevant to your income sources.

Overlooking Allowable Expenses

Many self employed business costs are deductible before your tax is calculated. Forgetting to claim these allowable expenses means paying more tax than necessary. Ensure you record these expenses accurately on your SA103.

Visit Gov.uk for a summary of allowable expenses if you’re self employed.

Mistakes in Ticking Boxes

Rushing through your tax return or lacking familiarity can lead to ticking incorrect boxes. Read the guidance notes carefully and consider using tax filing software to minimise errors.

Pension Contribution Errors

Pension contributions are summarised in the tax reliefs section of the SA100.

• Under “Payments to registered pension schemes where basic-rate tax relief will be claimed by your pension provider”, include the total gross value of your personal pension contributions.
• On page 4 of the SA100 Self Assessment tax return, fill in boxes 1 to 3 for payments to registered pension schemes and box 4 for payments to overseas pension schemes.
• On page 3 of the SA100 tax return, complete boxes 8 to 12 to provide details of gross UK pensions and annuities received, including lump sums, whether State Pension or private pension.

Correcting Self Assessment Errors

If you find mistakes post-filing, you have 12 months from the deadline to amend your return. For instance, errors in the 2022/23 return can be corrected until January 31, 2025. Depending on the error, this may result in additional tax payments or a refund if you’ve overpaid.

Taking time to ensure accuracy can save you from future headaches and financial penalties.