Our website uses cookies to store information on your computer. You may delete and block all cookies from this site, but parts of the site will not work as a result. Find out more about how we use cookies.
(Accept cookies and do not show this message again)
Shout99 - News matters for freelancers
Search Shout99 - News matters for freelancers
(Advanced Search)
   Join Shout99  About Shout99   Sitemap   Contact Shout99 19th Sep 2021
Forgot your password?
Shout99 - Freelancers, FO35, Section 660
New Users Click Here
Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660
Front Page
Freelancers' Shop...
Ask an Expert...
Direct Contracts
Press Links
Question Time
The Clubhouse
Conference Hall...
News from Partners


Business Links

Shout99 - Freelancers, FO35, Section 660

Freelancers' Shop

Personal Financial Services
from ContractorFinancials




Income protection

... and more special offers for Shout99 readers in the Freelancers' Shop

Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660

News for the
Construction Industry

Hardhatter.com - News for small businesses in the construction industry

Powered by
Powered by Novacaster

Research shows freelancers would struggle with'pay as you go' tax
by Susie Hughes at 12:27 04/08/21 (News on Business)
New research shows the idea of 'pay as you go' monthly or quarterly tax payments would leave two out of five freelancers struggling with cashflow.
The research was produced by self-employed group, IPSE, in response to an HMRC consultation on the possibility of increasing the frequency of self-employed tax payments.

The research found that nearly three quarters of freelancers (72 per cent) would struggle with the increased administrative burden if they had to pay tax more frequently. As a result, two thirds of freelancers (63 per cent) were opposed to paying corporation tax more frequently, and three out of five (57 per cent) were opposed to more frequent income tax payments.

Two out of five freelancers (39 per cent) said paying taxes more frequently would leave them less able to cover unexpected costs, while over a third (34 per cent) feared monthly or quarterly tax payments would lead to hidden HMRC or interest charges.

Another serious problem for many freelancers is where the money would come from: although 75 per cent of freelancers have money set aside specifically for taxes, one in five (19 per cent) would have to use money that’s currently covering their business expenses and almost a fifth (17 per cent) would have to use money currently invested in their business.
Another one in ten (11 per cent) would have to divert money that is covering their personal bills and expenses, while seven per cent have already used the money they would need for taxes to pay off debts.

The research also found that more than two-thirds of freelancers (69 per cent) are opposed to in-year income tax calculation instead of retrospective calculations. For corporation tax, this rose to 76 per cent.

At present, 44 per cent of freelancers pay income tax once a year, 39 per cent pay twice a year and 14 per cent pay more than twice a year. Given the choice, 45 per cent want to pay annually, one in six (16 per cent) want to pay twice a year, one in five (20 per cent) would prefer to pay quarterly and another one in six (16%) want to pay monthly.

HMRC is currently reviewing this research as part of its consultation process.

Andy Chamberlain from IPSE said: “HMRC is consulting on possibly making self-employed tax payments – income and corporation tax – more frequent. Some freelancers can see benefits to this proposal: 42 per cent of sole traders and 30 percent of company directors felt it would reduce the stress of paying a large tax bill. On the whole, however, it seems freelancers think this would be much more hassle than it’s worth – and could even leave many out of pocket.

“The biggest worry across the board is admin burden: unsurprisingly, most freelancers think they would struggle with having to go through the already arduous process of self-assessment every month or even every three months. This is, quite simply, time when they could be making money.

“Another big worry for freelancers is that this would create a real financial strain for them. For a proportion of freelancers, paying taxes more regularly would force them to divert money from their businesses and even from paying their bills.

“The reality is more frequent payments would mean freelancers had to face not just one tax deadline, but four or even twelve: many fear the inevitable bumps in the road of freelancing would mean they would miss one and find themselves hit with fines and interest. Overall, there is a sense among freelancers that more regular tax payments are too much risk and hassle for too little reward.”

If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
Susie Hughes © Shout99 2021

Printer Version

Mail this to a friend

Copyright 1999-2018, Shout99.com | All Rights Reserved
Privacy Notice and Terms of Use