Freelancers fear they mistakenly overpay tax
Almost a quarter of freelance workers believe that they regularly overpay their taxes, in a finding that appears to put paid to the Revenue’s mantra ‘tax doesn’t have to be taxing.’
In particular, 22 per cent of workers surveyed by PeoplePerHour.com – a freelance project website – said they suspect they pay more than the necessary on Jan 31st – this Sunday.
The estimations of how much extra cash the freelancers
think they hand to HM Revenue & Customs vary, but one third of them say
they fear it could be as much as £1,000 a year.
Deductions, specifically how much they can deduct for common expenses, emerged as the single most difficult area of their tax affairs for the freelancers to understand.
For example, almost half of the self-employed workers were
unsure whether the
y were allowed to claim household office space as
An even greater chunk (66%) admitted that they hadn’t claimed
for office maintenance, such as decorating, because they were unsure if it
counted as a business outlay.
And also seeming aware of but not on top of ‘duality of purpose,’ half as many said they couldn’t work out the right percentage of insurance bills that they could claim when running a business at home.
"It can pay to get professional advice particularly when looking at large expenses you’re unsure of,” recommended PeoplePerHour Founder Xenios Thrasyvoulou.
“The savings on your tax bill will more than pay for the
advice of someone in the know, not to mention the peace of mind it brings.”
But the freelancers are unaware what to deduct if they
want to be more ‘in the know’ in their business. Specifically, 51% were uncertain
when training courses were an allowable expense.
Editor’s Note: Related Reading –
28th January 2016