Avoid Costly Mistakes: How UK Self-Employed Workers Can Claim Correctly and Save More Tax

Being self-employed in the UK brings flexibility and opportunity, but it also means taking responsibility for your own taxes. Many self-employed people unknowingly make mistakes when claiming expenses, costing them valuable tax savings. In this blog, we explain the most common errors and how you can claim correctly to maximise your tax efficiency.

Common Mistakes Self-Employed Workers Make When Claiming Expenses

1. Missing Out on Allowable Expenses
Many self-employed individuals fail to claim all eligible expenses. If it’s a cost incurred “wholly and exclusively” for business purposes, you can claim it.

Examples often missed include:

• Business mileage
• Home office expenses
• Professional memberships
• Mobile phone bills used for business

2. Claiming Personal Expenses
Claiming personal or mixed-use expenses without proper adjustment can lead to HMRC penalties.
Tip: Always separate personal and business costs. If an item is used partly for business (like your phone), only claim the business percentage.

3. Poor Record-Keeping
Not keeping accurate receipts and records leads to errors and missed claims. HMRC expects detailed evidence of your expenses for at least 5 years after the 31 January submission deadline.

4. Not Using Simplified Expenses
Self-employed people can use Simplified Expenses for costs like vehicle use and working from home. These flat rates often save time and reduce errors compared to working out actual costs.

5. Forgetting About Capital Allowances
When you buy large items like computers, machinery, or equipment for business use, you can claim capital allowances and reduce your tax bill. Many forget to claim the full Annual Investment Allowance (AIA).

6. Ignoring Professional Advice
Trying to manage your own tax affairs without understanding all the rules can mean missing legitimate claims. Working with an accountant can ensure you maximise deductions legally and efficiently.

How to Save More Tax as a Self-Employed Person

Claim All Eligible Expenses
Review your spending carefully and claim everything you’re entitled to — from software subscriptions to travel costs.

Use a Business Bank Account
Separating your business and personal finances makes record-keeping easier and ensures you don’t miss deductible expenses.

Keep Accurate Records
Use bookkeeping apps or cloud accounting software to track every business-related expense in real-time.

Take Advantage of Simplified Expenses
If you work from home or use your car for business, using HMRC’s simplified rates could save you both time and tax.

Invest in Your Business
Buying necessary equipment before your accounting year-end can bring tax savings sooner through capital allowances.

Work with a Professional Accountant
An expert accountant can find additional claims, correct mistakes, and help you save far more than their fee in tax over time.

Conclusion

Self-employment offers fantastic opportunities, but simple mistakes in expense claims can cost you thousands. Understanding what you can and cannot claim, keeping good records, and getting professional advice will help you save more tax and keep your business financially healthy.

SV&Co are specialists in helping self-employed individuals claim correctly and pay only what they need to.
Contact us today for a free consultation and discover how much you could be saving.