A lot of people make the same mistakes with Self Assessment. Not because they’re careless — but because the system is genuinely unfamiliar the first time you encounter it.
Here are the ones that come up most often.
Missing the registration deadline
Before you can file a tax return, you need to register for Self Assessment. If you’re filing for the first time, the deadline to register is 5 October following the end of the tax year you need to declare. Miss it, and you could face a penalty — even if you had no tax to pay. (HMRC — Check how to register for Self Assessment)
Confusing income and profit
Income tax on self-employment is calculated on your profit, not your gross income. Your profit is your income minus your allowable business expenses. Declaring your total income without deducting legitimate expenses means you could be paying more tax than you need to. (HMRC — Expenses if you’re self-employed)
Not adding up income from all sources
The £1,000 trading allowance applies to your total trading income — across all platforms and activities. Some people presume the allowance applies separately to each income stream. It doesn’t. If you earn £700 selling on Etsy and £500 from dog walking, your combined trading income is £1,200 and you’re above the threshold. (HMRC — Check if you need to tell HMRC about your income from online platforms)
Missing the filing deadline
Online Self Assessment returns must be submitted by 31 January following the end of the tax year. The penalties for missing that deadline start at £100 immediately, with daily charges of £10 per day building up after three months. (HMRC — Self Assessment tax returns — penalties)
You can file as early as 6 April — as soon as the new tax year begins. Filing early means you know exactly what you owe well in advance of the payment date.
Thinking your employer sorts out side hustle tax
If you have a PAYE job, your employer handles the tax on your wages. They do not know about, and cannot account for, any income you earn separately. Your side hustle income is entirely your responsibility to declare. (HMRC — Tax Help for Hustles)
Keeping no records
HMRC expects you to keep records that support what you’ve declared on your return. This includes evidence of your income and your expenses. A simple record of sales and costs, kept as you go, makes the whole process significantly easier. (HMRC — Expenses if you’re self-employed)
None of these mistakes are difficult to avoid once you know about them. The best thing you can do is understand the basics before you need to act on them.
If you’re not sure where to start, HMRC’s checking tool will tell you whether you need to file a return.
Use our free UK side hustle tax calculator to check your position before you file — and go into Self Assessment with the right number.