What common mistakes are UK taxpayers making with Self Assessment filings in the 2024/25 tax year?

write a 50 word excerpt for SEO for the following article and place the excerpt between tags.Understanding the Landscape of Self Assessment in the 2024/25 Tax Year The UK Self Assessment system remains one of the most misunderstood and error-prone areas of personal taxation. Despite years of guidance from HM Revenue & Customs (HMRC), a significant number of taxpayers continue to make avoidable mistakes when filing their returns. In the 2024/25 tax year, these errors are being amplified by changes in reporting obligations, increased digitalisation, and greater scrutiny of returns. The result is a higher risk of penalties, delayed repayments, and stressful correspondence with HMRC. This article explores the most common mistakes UK taxpayers are making with their Self Assessment filings in the 2024/25 tax year. It goes beyond surface-level errors to explain why these mistakes occur, who is most affected, and how they can be avoided. Whether you are self-employed, a landlord, a company director, or someone with multiple income sources, understanding these pitfalls is essential for staying compliant and reducing unnecessary tax risk. Failing to Register for Self Assessment on Time One of the earliest and most fundamental mistakes taxpayers make is failing to register for Self Assessment by the correct deadline. Many individuals incorrectly assume that HMRC will automatically notify them when they need to file a return. In reality, the responsibility lies entirely with the taxpayer. This mistake is particularly common among newly self-employed individuals, those who start earning rental income, and people with side hustles or freelance work. With the growth of online platforms and the gig economy, more people are earning taxable income without realising it triggers a Self Assessment obligation. For the 2024/25 tax year, late registration can cause a cascade of issues. Without a Unique Taxpayer Reference (UTR), taxpayers may be unable to file on time, leading to automatic late filing penalties even if no tax is ultimately owed. Many people only discover the problem when attempting to submit their return close to the deadline, by which point it is often too late to avoid penalties. Missing the Filing and Payment Deadlines Missing deadlines remains one of the most common and costly errors in Self Assessment. There are multiple deadlines involved, and confusion between them frequently leads to mistakes. The online filing deadline, the balancing payment deadline, and the payment on account deadlines are often misunderstood or overlooked. In the 2024/25 tax year, taxpayers are increasingly relying on digital reminders and software prompts. While these tools can be helpful, overreliance on them can be risky. Emails may be missed, reminders may go to spam folders, or software settings may not be properly configured. HMRC penalties, however, are automatic and unforgiving. Even taxpayers who submit their returns on time sometimes fail to pay the tax owed by the deadline. This results in interest charges and late payment penalties that accumulate quickly. A common misconception is that submitting the return is enough to avoid penalties, when in fact payment is a separate obligation. Incorrectly Reporting Self-Employment Income Errors in reporting self-employment income continue to be a major issue in the 2024/25 tax year. Many taxpayers struggle to determine what counts as taxable income and when it should be recognised. This is especially true for those who are newly self-employed or who have irregular income streams. A frequent mistake is reporting only money withdrawn from a business bank account rather than total income earned. Others fail to include income received through online platforms, foreign clients, or cash payments. With HMRC receiving increasing amounts of third-party data, these omissions are more likely than ever to be identified. Timing errors are also common. Some taxpayers report income based on when invoices are issued rather than when payment is received, or vice versa, without understanding the accounting basis they are using. Inconsistent treatment can lead to underreported or overstated income and subsequent enquiries from HMRC. Claiming Ineligible or Poorly Supported Expenses Claiming expenses incorrectly is another widespread problem. While taxpayers are entitled to deduct allowable expenses incurred wholly and exclusively for business purposes, misunderstanding this rule leads to frequent errors. In the 2024/25 tax year, HMRC continues to scrutinise expense claims, particularly for home office costs, vehicle expenses, and mixed-use items such as mobile phones and internet bills. Many taxpayers either overclaim by including personal elements or underclaim by being overly cautious due to fear of getting it wrong. A common mistake is claiming flat-rate or simplified expenses without meeting the qualifying criteria, or switching between methods incorrectly from one year to the next. Others fail to keep adequate records, assuming that estimates will be acceptable. In the event of an enquiry, lack of evidence can result in disallowed expenses and penalties. Overlooking Income from Property and Lettings Landlords and property owners are particularly prone to Self Assessment errors. Income from property must be reported accurately, and the rules governing allowable expenses, reliefs, and finance costs are complex. Many taxpayers fail to include all rental income, especially when properties are jointly owned or when income is received irregularly. Others incorrectly deduct expenses that are capital in nature, such as property improvements, rather than revenue expenses like repairs and maintenance. The 2024/25 tax year continues to see confusion around the treatment of mortgage interest and other finance costs. Misunderstanding these rules can significantly distort taxable profits and lead to unexpected tax bills or compliance checks. Ignoring Additional Income Sources Another common mistake is failing to declare all taxable income. Taxpayers often assume that income taxed at source does not need to be reported on a Self Assessment return. While this may be true in some cases, there are many exceptions. Commonly overlooked income sources include savings interest, dividends, freelance work alongside employment, foreign income, and one-off payments such as bonuses or commissions. In the 2024/25 tax year, HMRC’s access to data from banks, employers, and overseas tax authorities makes it easier to identify discrepancies. Taxpayers with multiple income streams are particularly vulnerable to this mistake. Without a clear overview of all income received during the tax year, it is easy to omit something unintentionally. Miscalculating Capital Gains Capital Gains Tax (CGT) errors are increasingly common, especially as more individuals sell investments, second homes, or digital assets. Calculating gains correctly requires an understanding of allowable costs, reliefs, and exemptions, which many taxpayers lack. In the 2024/25 tax year, mistakes often arise from failing to report disposals at all, assuming that small gains are irrelevant, or misunderstanding how to calculate gains on jointly owned assets. Others incorrectly apply reliefs or forget to offset allowable losses. Timing is another issue. Some taxpayers report gains in the wrong tax year, particularly when contracts are exchanged in one year and completed in another. These errors can have significant tax consequences. Misunderstanding Payments on Account Payments on account remain one of the most confusing aspects of Self Assessment. Many taxpayers are surprised by the requirement to make advance payments towards the next year’s tax bill, especially if their income has increased. A common mistake is failing to budget for these payments, leading to cash flow problems and late payment penalties. Others reduce their payments on account without a valid reason, believing their income will fall, only to find themselves facing interest charges when this does not happen. In the 2024/25 tax year, fluctuating incomes and economic uncertainty have made this issue even more pronounced. Taxpayers need to understand how payments on account work and when it is appropriate to adjust them. Errors in Declaring Employment and PAYE Information Even taxpayers with straightforward employment income can make mistakes on their Self Assessment returns. Common errors include entering incorrect figures from P60s or P45s, duplicating income, or failing to include benefits in kind. Some taxpayers assume that because their employer operates PAYE, they do not need to be precise when entering employment details. In reality, discrepancies between employer submissions and Self Assessment returns are easily flagged by HMRC systems. In the 2024/25 tax year, benefits such as company cars, private medical insurance, and reimbursed expenses continue to be an area of confusion, leading to underreported taxable income. Failing to Check and Review the Return Before Submission Rushing to file close to the deadline often results in avoidable errors. Many taxpayers treat the submission of their return as the final step, without thoroughly reviewing the information entered. Simple mistakes such as transposed numbers, incorrect bank details, or missing sections can cause significant problems. These errors may lead to incorrect tax calculations, delayed refunds, or follow-up questions from HMRC. In the 2024/25 tax year, the increased use of pre-populated data has created a false sense of security. While pre-filled information can be helpful, it is not always complete or accurate, and taxpayers remain responsible for ensuring their return is correct. Assuming Software or Agents Will Catch All Errors While tax software and professional agents can greatly reduce the risk of mistakes, they are not infallible. A common error is assuming that using software or an accountant removes all responsibility from the taxpayer. Software is only as accurate as the data entered, and agents rely on information provided by their clients. In the 2024/25 tax year, HMRC continues to emphasise that the legal responsibility for the accuracy of a return always rests with the taxpayer. Failing to review drafts, ignoring queries from advisers, or not disclosing all relevant information can undermine the benefits of professional support. Poor Record-Keeping Throughout the Tax Year Many Self Assessment problems stem from inadequate record-keeping. Trying to reconstruct income and expenses months after the end of the tax year increases the likelihood of omissions and inaccuracies. In the 2024/25 tax year, digital record-keeping is becoming more important, particularly with the gradual expansion of digital tax initiatives. Taxpayers who rely on paper receipts, memory, or incomplete bank statements often struggle to produce accurate returns. Poor records also make it difficult to respond to HMRC enquiries, increasing stress and the risk of penalties. Underestimating the Consequences of Errors Perhaps one of the most damaging mistakes is underestimating the consequences of getting Self Assessment wrong. Some taxpayers view small errors as insignificant or assume HMRC will correct them automatically. In reality, even minor mistakes can lead to penalties, interest, and increased scrutiny in future years. Repeated errors may raise red flags and increase the likelihood of compliance checks. For the 2024/25 tax year, HMRC’s focus on data matching and compliance means that inaccuracies are more likely to be identified than ever before. How to Avoid These Common Mistakes Avoiding Self Assessment mistakes requires a proactive and organised approach. Registering early, keeping accurate records, and understanding your tax obligations are essential first steps. Allowing plenty of time to prepare and review your return can significantly reduce errors. Seeking professional advice where your affairs are complex can also provide reassurance and clarity. Most importantly, taxpayers should remember that Self Assessment is not just an annual task but an ongoing process that benefits from regular attention throughout the year. Final Thoughts on Self Assessment in the 2024/25 Tax Year The Self Assessment system places a significant responsibility on UK taxpayers, and the 2024/25 tax year is no exception. While the rules can be complex, many of the most common mistakes are avoidable with the right knowledge and preparation. By understanding where others commonly go wrong and taking steps to address these risk areas, taxpayers can reduce stress, avoid penalties, and gain greater confidence in managing their tax affairs. A careful, informed approach to Self Assessment is not just about compliance; it is about taking control of your financial responsibilities and planning more effectively for the future.