Less Obvious but Common Mistakes Made by Self-Employed in the UK

Many self-employed individuals incorrectly assume that any partially business-related expense can be claimed in full. In reality, HMRC only allows the business proportion of mixed-use costs. This commonly applies to mobile phones, internet bills, vehicles, and working-from-home expenses.

Another overlooked mistake is failing to set aside tax throughout the year. Since tax is not deducted at source, many self-employed individuals treat all incoming revenue as personal income and later face unexpected tax bills when Self Assessment is due.

A further common issue is misunderstanding “Payments on Account”. If your tax bill exceeds a certain threshold, HMRC may require advance payments towards the next tax year. Many self-employed people are caught off guard by this, as it can significantly increase the amount due in the first year.

Our team helps self-employed individuals plan their tax obligations in advance, correctly apportion expenses, and avoid unexpected liabilities with HMRC.