Freelance Accountants Pay Too Much Tax: Parasol Research
Half of the people who are working on a temporary basis in the accountancy and finance professions have been missing out on as much as 10% of their take-home pay.
Parasol, which is an employment service group, has conducted a research on the amount of tax temporary workers in the accountancy and finance professions are paying.
The research has revealed that there are at presently more than 86,000 professionals who are working on a temporary basis, either on contract or freelancing, in the UK alone.
The report has suggested that out of the total number, about 43,000 professionals are not taking full advantage of their self- employment status.
Professionals are losing out on a lot of their take-home pay because of the way they mishandle their own tax issues.
The report by Parasol has stated that 29% of the accountants who work by freelancing on contracting are paid through the PAYE systems of their recruitment agencies. It also reports that 21% work as sole traders while 29% work through their own limited company.
Parasol has further claimed in its research that those professionals who are working via agency PAYE or as sole traders are not taking full advantage of the tax benefits they are liable to because of them doing contracting or freelancing work.
Rob Crossland, who is the Chief Executive of Parasol, said that the trend is now that a lot of accounting and finance professionals are doing contracting and freelancing work as a sort of a stop-gap method between any permanent roles.
Crossland further said that accountancy and finance professionals, though they are capable of handling their client’s financial and tax issues diligently, they fail when it comes to their own. He added that this may result in significant losses.