The latest Office of National Statistics (ONS) figures show that the number of self-employed has grown to 4.2 million, with one in three new jobs since 2010 being a self-employed role. ACCA says that they face a complicated, self-assessment tax regime and that new changes to the child benefit system will mean many more people will self-assess.
ACCA also warned that taxpayers would need to make sure they were aware of new General Anti-Abuse Rules (GAAR) when it comes into force later this year to check they were not affected by the new rules.
Chas Roy-Chowdhury, head of taxation at ACCA, said: 'The once famous mantra that tax doesn’t have to be taxing holds no weight now for the growing number of self-employed in the UK. The tax system should be as simple and consistent as possible, especially when you are trying to get your business up and running, which is often the case for many self-employed people.
'It is easily forgotten that the self-assessment regime amounts to taxpayers doing the Government’s tax collecting paper work for free, but if it is wrong or late they can be penalised.
'The rise in those who are self-employed is good news, but the reality is that those who have turned to freelance work in order to pull themselves out of unemployment and those who have decided to work for themselves face a challenging tax maze that could land them in hot water should they get it wrong.'
ACCA says that self-assessment was originally supposed to be easy, but that the complicated nature of the UK tax system means that the self-employed are beginning to experience the same tax challenges SMEs currently face. ACCA says that globally, SMEs spend, on average, 36 working days a year ensuring they meet with tax regulations.
More people are set to self-assess with the changes to child benefit, which HMRC estimates will mean some 500,000 parents having to complete the self-assessment tax form each year in order to pay the higher rate charge. The system has been designed so that more tax is paid to cancel out or reduce the gain from child benefit.
Chas Roy-Chowdhury commented: 'The higher number of self-employed and families who are looking to self-assess means that there are a lot of first-timers entering this confusing process. No tax system should be a hindrance to businesses or families, but the self-assessment process is far from straight forward.'
Help with tax returns is available, says ACCA, from HMRC and from speaking to an ACCA qualified accountant.