Are the self-employed paying too much tax?

Friday 29 January 2016

Navigating the world of taxes is not an easy thing to do when you are your own boss, whether that is as a freelancer, a contractor or a consultant. While being self-employed usually brings with it a large number of benefits, one disadvantage it has is that there will be no accounts department to sort out taxes for you.

It seems that this could be leading to a state of tax over-paying, as self-employed workers overestimate how much they owe the UK government. With tax returns needing to be filed on Sunday (January 31st), there is a pressing need to make sure freelancers know how much they need to pay.

A recent survey conducted by freelance website found that almost one in four (22 per cent) of self-employed workers believe they will be paying too much in tax on January 31st. This is largely due to a lack of awareness surrounding what items could be claimed as business expenses.

Of those who thought they were overpaying their taxes, around a third of them worry that they could be paying out as much as £1,000 per year more than is necessary. This indicates the need among self-employed workers to seek professional financial help to avoid losing out on their tax return.

This is echoed in the sentiments of's founder Xenios Thrasyvoulou, who said: "It can pay to get professional advice particularly when looking at large expenses you’re unsure of. 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."

The items that many freelancers don't realise they can claim on their expenses vary from person to person. However, the survey revealed that there are several common things that self-employed workers seem to struggle with when it comes to taxes.

For example, roughly half of the workers surveyed were unclear as to the proportion of their household bills and insurance they could claim if they worked from home. A similar amount of freelancers did not know whether household office space could be claimed as an expense.

Some 66 per cent of those surveyed said they had not claimed for office maintenance, which can include steps such as decorating. These people were not sure whether this activity would count as a business outlay. Furthermore, 51 per cent did not know whether they could claim for the cost of training courses.

These tax deductions can save a lot of money each year, and they are well worth paying attention to. If you are not sure what you can and cannot claim on your expenses, get in touch with Brookson. We can provide you with financial advice and accountancy services that will make your taxes much easier.

By Victoria McDonnell

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