More than 70% of self-employed people are forced into debt each year ahead of the January 31st HMRC self-assessment deadline.
A recent survey by self-assessment tax software company GoSimpleTax has revealed that a quarter of these people feel that this early-year deadline impacts Christmas and have contemplated career options as a result.
More than two thirds of sole traders admitted they’ve had to borrow funds from family or friends in order to pay their tax bill, with others resorting to credit cards and overdrafts.
The research also found the majority of people leave it until the last minute to submit their return, with many filing on deadline day or beyond. It was found that this is due to doubts or concerns with filling in the return form.
And it isn’t just ‘typical’ freelance workers that get stung by the taxman. Just recently, it was revealed Eastenders actor Cliff Parisi was forced to take part in ITV’s I’m A Celebrity… Get Me Out Of Here! to find the funds for an unexpected tax bill.
As part of a recent campaign from GoSimpleTax, the software specialists are offering to pay one person’s tax bill for the year. This comes after findings revealed the post-Christmas deadline affected many people’s wellbeing and were unable to really enjoy the festive season due to financial worries.
Most entrants have already been planning how to spend this extra cash, with half of respondents admitting they would book a holiday with the money.
Mike Parkes, Technical Director at GoSimpleTax, a self-assessment tax software, said: “The stress of being self-employed is two-fold. There’s the financial worry but also the worry of filing a tax return correctly. Our technology aims to simplify this process.
“Poor tax planning can also create issues and some people face getting into debt in a reactive way to pay the bills. Crucial to avoiding debt is ensuring people put away a minimum of 15% or more – depending upon the nature of the business – sole trader earnings to help cover their tax bill to avoid any nasty surprises.”