When you’re self-employed – or running a side hustle alongside a job – you’re the one responsible for reporting your income and paying the right amount of tax. Get it wrong, and it can cost you time, money, and a fair bit of stress.
1. Missing deadlines
HMRC doesn’t take kindly to late returns or late payments.
- Late filing penalty: £100 if you miss the deadline, even by a day.
- Extra penalties: The longer you delay, the more it adds up. After 3, 6, and 12 months, daily fines and percentage penalties kick in.
- Interest: HMRC charges interest on unpaid tax from the day after it’s due.
Buzz tip: Set reminders months in advance. Don’t leave it to the last week in January.
2. Paying too little tax
If you underpay, HMRC will expect you to make up the shortfall – plus interest and possibly a penalty.
- Interest: Charged from the date the tax was due.
- Penalties: Can be up to 30% of the unpaid amount if HMRC thinks it’s careless, and more if deliberate.
- Stress factor: Getting a brown envelope with the words “Notice of Penalty Assessment” isn’t a fun day.
Buzz tip: Keep your records up to date all year so you know exactly what you owe.
3. Paying too much tax
Overpaying isn’t the end of the world, HMRC will refund you, but it’s still your money sitting in the wrong account.
- Refunds can take weeks or even months.
- Overpayments usually happen when you guess instead of working from accurate figures.
Buzz tip: Real-time bookkeeping stops you from overpaying in the first place.
4. The knock-on effects
- Cash flow hit: Late penalties or surprise bills eat into money you could use to grow your business or cover personal expenses.
- Business credibility: Consistent late filings can impact how lenders and partners view you.
- Extra admin: Sorting mistakes after the fact is always harder than doing it right the first time.
Getting your tax wrong is more than a small admin slip, it’s a financial and reputational risk. The good news? It’s completely avoidable with the right tools and habits.
Buzz keeps your records clean, your deadlines visible, and your tax position clear, all year round.
