Self Assessment Compliance: Avoid Costly Errors

Many first-time filers underestimate Self Assessment compliance requirements. At Brightson Accounting, we help individuals across Wolverhampton and the West Midlands avoid the most common — and costly — errors.

Who Must File a Self Assessment?

You must file a Self Assessment tax return if you:

• Are self-employed (sole trader or partner)
• Are a company director
• Have rental income over £1,000/year
• Have untaxed income over £2,500
• Earn over £100,000/year (from any source)
• Receive dividends and your total income exceeds personal allowance
• Have capital gains above the annual exempt amount

Not sure if you need to file? Speak to an accountant to confirm your obligations.

Registration Deadlines

5 October: Deadline to register for Self Assessment if you're newly self-employed or have new untaxed income.

Example: Started self-employment in May 2026 → Register by 5 October 2026.

Late Registration Penalty: £100+ if you miss the deadline (even if you owe no tax).

Filing Deadlines

Full guide: HMRC Deadlines You Cannot Afford to Miss

What to Declare

You must declare ALL income, including:

Self-Employment Income

• All business income (sales, invoices, cash)
• Side hustles and freelance work
• Gig economy earnings (Uber, Deliveroo, etc.)

Employment Income

• Salary, bonuses, benefits
• Pension income
• Untaxed tips and gratuities

Property Income

• Rental income from UK property
• Rental income from overseas property
• Airbnb and short-term letting

Investment Income

• Dividends from shares
• Interest from savings
• Income from trusts or estates

Capital Gains

• Profit from selling property (not main home)
• Profit from selling shares or investments
• Profit from selling business assets

Allowable Expenses for Self-Employment

If you're self-employed, you can deduct business expenses from your income:

• Office costs (rent, utilities, supplies)
• Travel (business mileage, train, hotels)
• Professional fees (accountant, solicitor)
• Marketing and advertising
• Business insurance
• Staff costs (salaries, pensions)
• Stock and materials

Rule: Expenses must be "wholly and exclusively" for business. Mixed-use expenses (e.g., home broadband) can be partly claimed.

Payment on Account Explained

If you owe over £1,000 in tax, HMRC requires you to pay tax in advance for the next year.

How it works:

• 31 January: Pay 50% of last year's tax bill (first payment on account) + any balance from previous year
• 31 July: Pay remaining 50% (second payment on account)
• 31 January (following year): Pay balance + first payment for new year

Example: 2025/26 tax bill = £4,000

• 31 Jan 2027: Pay £2,000 (first payment on account for 2026/27) + £4,000 balance = £6,000 total
• 31 Jul 2027: Pay £2,000 (second payment on account)

Common Self Assessment Mistakes

1. Missing Income

Failing to declare all income is the most common error. HMRC receives data from employers, banks, and other sources — they will know if you've missed something.

2. Incorrect Expense Claims

Claiming personal expenses as business = penalties. Only claim legitimate business costs with receipts.

3. Late Filing

£100 penalty from day 1 of being late. Penalties increase if you're over 3 months late.

4. Not Keeping Records

You must keep records for 5 years after the 31 January filing deadline. No records = HMRC can estimate your income (usually higher than reality).

Full guide: Record Keeping Requirements for UK Businesses

How Brightson Accounting Can Help

We help individuals across Wolverhampton and the West Midlands with:

• Self Assessment registration and setup
• Tax return preparation and filing
• Expense optimization (claiming everything allowable)
• Payment on account calculations
• HMRC enquiry support

Want to stay compliant and reduce your corporation tax at the same time? We can help with both.