The freelancer who built his own tax app

The new tax year is on our doorstep and along with it, some new technology promising to take the edge off.

Specifically for freelancers, Taxo'd was created by then freelance designer Dave Legion, a 34-year-old from Cardiff. He had tried and tested various accounting tools but was dissatisfied - so simply started to create his own over the course of four years.

Legion now lives in London and is marketing his app to others like himself.

The app calculates your tax and shows you on a running basis how much you owe by recording what money comes in and what money comes out, and it also files your tax return.

We spoke to Dave to find out why he went freelancer-turned-small business owner and what is aim is for his product.

What was your motivation for developing the app?

I hated everything about the tax process. I just wanted an easy way to stay in control of my finances, but there was no software that catered for me as a freelancer - they were all tailored to big businesses paying corporation tax.

When you start a business you have to become in instant financial expert. Most freelancers don't have that sort of knowledge - or time - and pay someone else to do it.

I wanted to cater for the self-employed and to keep it as simple as possible for people to understand.

How does the app work?

Users record their business transactions as they go, and the app calculates a real-time tax bill and files a tax return.

The app asks users a series of questions to build up an accurate tax profile, its interface allows users to input incomings and outgoings via plus and minus symbols, with results displayed in a pie chart.

The app's out now and available online, on iOS and Android and will be available to use from 6 April 2016. Anyone registering by 5 April 2016 can use TAXO'D and file their 2017/16 self-assessment free of charge.

If you register from 6 April onward, the app costs £6 per month or £60 per year to use the app and file your tax return.

How will you cope with the Making Tax Digital plans by the government?

Taxo'd is perfectly set up to deal with that. In fact the app will become more relevant than ever because you can use it to automatically submit your tax returns to HMRC throughout the year.

What kind of funding do you receive?

I've spent around £50,000 developing the app so far. This has all been self-funded or raised from family and friends. We are now looking to raise our first seed round.

What kind of marketing do you do?

We were fortunate to be part of Virgin's Pitch to Rich competition last year, missing out on the final by a whisker, which really helped get the Taxo'd name out there.

Other than that we haven't done any formal marketing, it's all been through social media and word of mouth. We hope to step this up now the app is ready to launch.

Do you have a customer base already - if not, how do you plan to acquire one?

After we launched our website last year more than 1,000 people signed up for the app.

We're targeting freelance communities and we are hoping to use their creative talents to help us push Taxo'd, to become our ambassadors and spread the word.

What particular problem do you aim to solve and where do you aim to be in the next few years with this?

I want Taxo'd to free up a generation of freelancers to get on with doing the work they enjoy instead of stressing about tax.

The goal is to continue to simplify it, to streamline it and to automate it to make the whole process as pain free as possible.

Why do you think nothing else worked for you in the past or freelancers in general?

There are plenty of tax calculating tools available but most are tailored to big businesses and include things like corporation tax and payroll, neither of which apply to freelancers.

Even the software that claims to cater for freelancers is still the same software used by big businesses.

And without the ability to file, you are often paying premium for a glorified spreadsheet. Most freelancers aren't financial experts and don't want to be either - they just want to get on with what they love doing, not calculate their tax bill.

Any advice for people wanting to set a business up while still working full time?

The most important thing is to keep the work going, even if it means working on the start-up in your spare time. You will have to jump in with two feet to make it a success, but there's nothing wrong with wearing a safety ring. Just try not to put too much stress on yourself.

Ultimately you will get to a point where the start-up will start making money or you will raise the money you need to and so you can make the transition into doing it full time.

I could never be focused on just one thing - that's not who I am - but Taxo'd is my most dedicated and immediate focus at the moment, and will be for the next few years.

What do you do to make the new tax year simpler for you? Comment below (login or sign up first).