Self-Employed Struggling With Tax Obligations
Self-Employed Struggling With Tax Obligations
Self-employed individuals are having difficulties completing their self-assessment tax return, according to a new report commissioned by HMRC.A lot of people have trouble with their tax reporting duties because of confusing terminology, ambiguity around allowable business expenses and uncertainty transferring figures to HMRCs system, according to the report.
Undertaken by Kantar on behalf of HMRC, the data and insights company uncovered a consensus among the self-employed that the first year of business was the most challenging in terms of tax duties. Many talked about the stress of finding out what they needed to do at the start of their business journey, which was compounded by the fear of making costly mistakes.The ambiguity of business expenses and the difficulty calculating the amount that can be claimed was also raised as a common issue, even among those with strong knowledge of the tax system. A lot of business owners said they were unsure about what is classed as a business expense for tax purposes, especially when the item in question can be used both for business and personal purposes.
Even those who consequently sought advice online or from an accountant to gain clarity nevertheless had ongoing uncertainty. Whether someone found managing their tax affairs difficult primarily came down to their personal capability, Kantar said.
Personal capability included financial organisation, computer skills, fears of getting things wrong and access to support. However, income complexity also influences the experience of the self-employed with their taxes, according to Kantar in particular the number of jobs they have and the number or length of contracts.
Although many low earners below the tax threshold said they were unconcerned about their taxes, some still said they would get help from an agent for reassurance if they could afford one. They said that an agent or accountant could help them understand confusing terminology and ensure boxes are ticked and figures are input correctly.
