Local accountants share the five biggest mistakes taxpayers make
West Midlands-based accountancy firm Prime Accountants is urging people not to leave their tax affairs to the last minute after revealing the most common mistakes they see year after year.
Paislei Godley, Director at Prime, said many problems arise from simple oversights that can lead to unnecessary stress, penalties or higher tax bills.
“A lot of people sit down with us thinking they have done something terribly wrong. Most of the time, they have not. What has happened is that a few small things have been missed during the year, and it adds up when we start preparing the return.”
The firm has highlighted five mistakes that regularly cause difficulties for taxpayers.
Leaving tax returns until the last minute
Waiting until January to deal with a tax return remains one of the most common problems.
According to HMRC, an estimated 1 million people missed the 31 January 2026 deadline for filing their self-assessment tax returns.
Preparing accounts in a rush often means people cannot easily find documents or remember details from earlier in the year.
Paislei said: “We have all had the call in January where someone says they will send everything over tonight and then spends hours digging through emails and bank statements.
“It is stressful for them and it does not need to be. If you gather things gradually during the year, the return becomes a simple job rather than a scramble.”
Starting earlier also gives people time to deal with questions before the deadline approaches.
Being caught out by the first big tax bill
Many people moving into self-employment underestimate their first tax bill, particularly when payments on account are included.
“We often have to explain why the tax bill looks bigger than they expected,” said Paislei.
“Someone might think they owe tax for one year. What they actually see is tax for that year, plus part of the next one. When you know that is coming, you can plan for it. When you do not, it can feel like a shock and you may find yourself panicking over how you will afford it.”
The firm encourages clients to set money aside regularly rather than waiting until the bill arrives.
Forgetting everyday business expenses
Clients often overlook routine costs that could legitimately reduce their tax bill.
Mileage, small equipment purchases and software subscriptions are common examples.
Paislei said: “People sometimes think expenses need to be large in order to qualify for relief. However, the regular, smaller costs can actually make a big difference to the final tax bill. We often go through a client’s records and point out things they simply had not thought about.”
Keeping notes and evidence of expenses, such as invoices or receipts, during the year helps avoid missing them later.
Mixing business and personal spending
Using one bank account for everything often makes it harder to keep track of finances.
The firm says this is particularly common among freelancers and small business owners in their early years.
Paislei said: “When everything goes through one account, it becomes difficult to see what the business is actually earning and how much they are spending on business expenses. Clients often tell us they did not realise how messy it had become until we started sorting through it together.”
Opening a separate account for business income and costs can make it much easier to track and report your finances.
Waiting too long to ask questions
Many people only speak to an accountant once they need a return submitted.
This means opportunities to plan during the year are often missed.
Paislei said: “The best conversations with clients usually happen months before a return is due. That is when we can look at what they are doing and make small adjustments. A quick conversation at the right time can save someone a lot of money and worry.”
The firm encourages taxpayers to review their finances regularly and seek advice early if they are unsure about their position.
“Most clients feel relieved once they talk things through with us,” concluded Paislei.
