Top Five Tax Errors for Freelancers

Taxes Due Datebook Reminder

The Boox Report, a comprehensive analysis of the UK’s self-employed workforce, has revealed the top five tax errors committed by those who are in charge of their own business finances. 42% of those who work as freelance contractors manage all of their work finances themselves, and the survey found that of those who have taken charge of their finances, there were five tax errors which kept recurring.

Laurence Collins, the Managing Director of Magic Accounts, an online accountancy service specialising in small business finance, says, “Freelance contractors who manage their own finances are often guilty of a number of errors which are losing them money and putting their own financial security at risk. It is important for these individuals to outsource their accounting to specialists who can help them to minimise their own tax liability and stop falling foul of these mistakes that are costing them so much.”

26% of those surveyed said that they had paid too much tax; the top complaint of freelance contractors who took care of their own finances. Missing out on tax breaks due to being uninformed about tax issues, and paying too much National Insurance are the top causes of this across the country, and Brits are missing out on billions of pounds per year through paying too much tax. This type of error can be avoided simply by outsourcing all finances to a small business accountancy service; a company which can advise on minimising tax liability, offer assistance in applying for tax breaks and prevent contractors from paying too much where it is unnecessary.

15% of the people who took part in the surveys for the Boox Report said that missing payment deadlines was their most common error where tax is concerned. When freelancers have so much work to contend with and no one to remind them about their payment deadlines, they can often find that they miss the payment and end up paying interest or paying fines for late submission of payments. Missing tax payments is not just a leading cause of tax errors for freelancers, but also for UK residents in general.

Other common tax errors including not paying enough tax and having to pay extra further down the line, overpaying suppliers for their work, and failing to send out invoices on time. Employing an online accountancy service to handle all finances can put a stop to these errors and put more money in the pockets of freelance contractors across the country.