Partner Article

It PAYES to be informed

Recent research found that a staggering third of UK contractors have received a fine or penalty from HMRC - that equates to nearly 600,000 UK workers. Of those surveyed more than half (55 per cent) say they struggle to understand HMRC guidelines, leaving nearly 880,000 contractors at risk to be fined as well.

This may not be that surprising to those who currently work in a contract capacity as the same survey found that nearly half (42 per cent) said that understanding and adhering to tax and HMRC guidelines was their biggest concern when choosing to become a contractor in the first place. And if working with tax codes and HMRC legislation isn’t your full day job, it is understandable that it may seem confusing.

However, being on the right side of the law needn’t be a headache, require hours of learning legislation or piles of paperwork. It is always worthwhile seeking counsel from a neutral specialist or third-party, like an umbrella company, who are experts in working with the HMRC.

We all know that the HMRC doesn’t consider ignorance to be an excuse - and whereas many fines are a result of simple administration mistakes, the survey also found that a whopping 54 per cent of contractors don’t even know what they can claim as an expense. The consequences of getting this wrong is that workers could be hit with a monetary penalty and be liable for payment of back taxes.

Being a contractor provides many benefits, including a flexible lifestyle and a greater work/life balance, but it is still important to ensure you are being legally compliant. Being on the right side of the law isn’t obligatory, it’s mandated and needs to be at the top of every contractor’s priority list.

This was posted in Bdaily's Members' News section by Paraplus .