43,000 accountancy freelancers overpaying tax
Accounting freelancers working as sole traders, or being paid via recruitment agencies, may be paying too much tax, according to PAYE specialists Parasol
43,000 accountancy freelancers are missing out on up to 10% of their net fees
because they are paying too much PAYE, according to a new study.
The report, commissioned by Parasol, PAYE solution specialists, said some
freelancing accountants are disadvantaged because they pay 50% PAYE by working
as a sole trader or through a recruitment agency.
Parasol’s report found 29% of freelance accountants were paid via their
recruitment agency’s PAYE system and 21% worked as a sole trader.
There are currently more than 86,000 accountancy professionals working as
contractors or on a freelance basis in the UK.
Parasol said working via an umbrella company, for example, would mean that
freelancers would be able to claim tax relief on legitimate business expenses
incurred for travel and subsistence, ultimately leaving them with more take home
pay in their pocket.
Rob Crossland, chief executive of Parasol, said: “Although by no means a new
way of working, freelancing is a growth area in accountancy and freelancers are
still working out the best ways to work and ensure they are paying the correct
amount of tax.
“There is a duty of care here for the agents that place them as well as they
need to be fully aware of all the options open to freelancers and be able to
advise on the most tax efficient.
“For anyone about to take the plunge, it’s worth fully examining all the
options available and make an informed decision on the best way to manage your
business.”
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