Tax Rebates & Refunds

Be more vigilant when freelance work complicates your tax position

June 17, 2012
Posted in Other Tax — Written by Geoffrey

You could argue that when you actually do some freelance work outside of your ordinary job, there is a greater chance of the HMRC getting things mixed up when it comes to working out how much tax you should pay. This is largely because there is more to think about. When your working life becomes a little more complicated, the likelihood of tax errors becomes higher.

Most people work from a decent formula when it comes to freelance work. Their salary is taken care of in the sense that tax is taken out automatically and this is usually correct, although you do need to keep an eye on it and take note of any changes. Freelance workers often take 75% of what they earn and leave the remainder in a business account (a necessary accessory for those who work freelance).

The remainder then covers the tax bill that arrives at the end of the tax year. In many cases there is more left over to play around with. However, it is important to be vigilant and get more acquainted with taxation so that you can claim tax back when things don’t work out correctly and so that you can defend your position when you get a bill that seems excessive.

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