Almost a quarter of freelancers believe they are overpaying their taxes, with much of the confusion arising from not understanding what can be deducted as an expense

 
Hayley Kirton
Follow Hayley
BRITAIN-TAX-ILLUSTRATION
Some people could be shelling out an additional £50,000 throughout their career (Source: Getty)

While Google has found itself in the spotlight recently for striking a deal with HM Revenue & Customs (HMRC) to fork over £130m in unpaid corporation tax, many self-employed people are facing almost the opposite problem.

According to a survey from PeoplePerHour, nearly a quarter (22 per cent) of freelancers think they have been regularly overpaying the UK's tax authority.

A third (33 per cent) of those who are worried they have been overgenerous with their tax contributions think they may have overpaid by between £750 and £1,000, and PeoplePerHour calculates that this could mean some freelancers will be handing over an additional £50,000 throughout the course of their working life.

"If you’re not into your numbers, filing a tax return can be a nightmare, so I do have sympathy with those who find themselves paying more than they should," said Xenios Thrasyvoulou, founder and chief executive of PeoplePerHour. "There is a lot to take care of when it comes to running your own business, keeping track of your finances is truly the key to success."

Read more: Literally everything you'll need to fill in your online tax return

Almost half (46 per cent) of those surveyed said that they completed their return themselves rather than hiring accountant, and many said they were unsure what they could and could not deduct as an expense from their takings.

However, more than a third (37 per cent) also admit to leaving their tax return until the 11th hour, meaning they could be more likely to make mistakes because they're rushing to get everything done before 31 January.

Earlier this month, the Institute of Chartered Accountants in England and Wales warned those who were still yet to file their yearly papers not to leave it until the last second, pointing out that, as deadline day falls on a Sunday this year, help is less likely to be on hand to answer any crucial final questions.

Related articles