TaxCalc Blog

Self Assessment myths debunked: what’s true and what isn’t in 2025

If you’re completing your Self Assessment tax return yourself, it can be difficult to know what’s accurate and what’s just hearsay. Friends, social media, forums and even “well-meaning” advice can easily lead to confusion and, in some cases, unintentional mistakes.

To help you feel confident and in control this year, we’ve debunked some of the most common Self Assessment myths people still believe when filing their return for the 2024/25 tax year.

Myth 1: “If I don’t owe any tax, I don’t need to file a return.”

Reality: If HMRC has told you to file a Self Assessment tax return, you must complete one, even if you believe no tax is due. Failing to file can lead to penalties, even with no tax liability.
If your circumstances have changed and you believe you no longer need to file, you’ll need to advise HMRC formally and wait for confirmation that they’ve removed you from the system.

Myth 2: “I only have a small side hustle, I don’t need to declare it.”

Reality: All income is taxable unless it’s covered by an exemption. If you earn more than £1,000 in trading income (before expenses), you’ll normally need to register for Self Assessment and report it, even if it’s “just a few online sales”, tutoring or occasional freelance work. Similarly, rental income will also need to be declared, depending on the amount and circumstances.

Myth 3: “I only work part-time or casually - HMRC won’t be interested.”

Reality: HMRC doesn’t assess tax based on whether you see your activity as “full-time” or “serious”. If you receive taxable income, it may need to be reported, regardless of how small or casual the work may feel. Missing taxable income could lead to unexpected bills or penalties later.

Myth 4: “I can claim everything I buy for my business, even if I use it personally.”

Reality: You can only claim expenses that are “wholly and exclusively” for business purposes. If something has both personal and business use - such as a phone, broadband or a laptop - you must separate and claim only the business portion. Being realistic and fair with your claims reduces the risk of HMRC scrutiny.

File your tax return with TaxCalc from as little as £38. Find out more about it here.

Myth 5: “If I file early, I’ll have to pay the tax straight away.”

Reality: You can file your return as early as April immediately after the tax year ends but payment isn’t due until 31 January 2026 (or 31 July if you make payments on account). Filing early simply gives you more time to prepare and budget, thus reducing stress levels closer to the deadline.
In many cases, early filing helps people avoid late surprises and penalties.

Myth 6: “HMRC will correct any mistakes for me.”

Reality: HMRC sometimes correct entries or complete missing information if they have it on their records, but not always. You are responsible for ensuring your return is accurate and complete and you shouldn’t rely on HMRC to get it right for you. Fortunately, good Self Assessment software can guide you through the process and help reduce the risk of typing errors, calculation mistakes or missed income.

Myth 7: “If I didn’t make a profit, I don’t need to declare anything.”

Reality: You still need to file a return if you are registered for Self Assessment, even if your business made a loss. In fact, declaring your loss can work in your favour as it may generate a tax refund or be carried forward to offset against future profits. Not filing may mean missing out on a tax advantage you’re entitled to.

Myth 8: “I don’t need to keep proper records, I’ll just estimate.”

Reality: HMRC expects you to keep accurate records for at least six years, including invoices, receipts, mileage logs and expense breakdowns. Estimates or guesswork can lead to errors, and if HMRC asks for evidence, you’ll need to provide it. With Making Tax Digital for Income Tax coming for many sole traders from April 2026, digital record-keeping will soon be essential.

Myth 9: “HMRC already knows my employment income, so I don’t need to include it.”

Reality: While HMRC may receive some data from employers, banks and (increasingly) digital platforms, you are still responsible for declaring the correct total income. Relying on HMRC to “fill in the gaps” could leave you with undeclared income and the additional tax, penalties and interest that come with it. 

Myth 10: “Once I press submit, I can’t change my return.”

Reality: You can amend your return for up to 12 months after the filing deadline. If you realise later that you forgot an expense, missed some income or made an error, you can correct it.
However, it’s always better to get it right first time. Using software that flags missing sections and highlights inconsistencies can help.

Final thoughts

Feeling unsure about what’s true and what’s not is completely normal, especially if you’re completing your return without the aid of an accountant. The important thing is to work with accurate information, keep good records and take your time.

Using trusted tax return software can help guide you through each step, prompt you about what needs entering and help reduce your risk of errors or missed sections.

By knowing the facts and dismissing the myths, you can complete your Self Assessment with clarity and confidence.

For a simpler way to file your tax, download TaxCalc’s award-winning tax return software today! Learn more here.