Digital tax returns could benefit contractors according to one firm
When the Chancellor announced his intention to press on with plans to digitise the self-assessment tax system, many contractors and other independent professionals were concerned that this would introduce an unwelcome administrative burden on them. However, increasing the frequency with which reporting would be required might not be such a bad thing, according to one group who have gone against the flow of critics and negative commentary by supporting the move.
With the plans involving a £1.3 billion investment into the systems used by HM Revenue and Customs, the end result could be increased efficiency on the part of the taxman which would free up time and resources within the department to focus on the bigger issues of tax avoidance. There should also be a concomitant reduction in level of activity required to ensure ongoing compliance on the part of small businesses, which currently shoulder a disproportionately high level of responsibility in this area.
The planned requirement for independent professionals and small businesses to make quarterly reports has provoked a significant response amongst a variety of organisations. Some believe that this is the first step on the road to accelerated payments for anyone who isn’t taxed at source, whereas others are concerned that, despite the cash injection, the department simply won’t be able to cope with the influx of data. The latter cite the fact that HMRC are failing to even answer their phones at present as evidence that digitising the tax return system will prove a gargantuan task which might simply be beyond their abilities within the timescales specified.
Whilst many agree that it is high time the tax system was digitised to ensure that it is in line with the rest of the banking, finance and even retail world, those who are sceptical as to the efficiency with which the department is able to produce results may well be proved correct.
Anyone who wants to work for themselves should be prepared to take on a lot of new information about their taxes which can seem overwhelming, but our guides will help you to understand everything you need to make an informed decision. Our take home pay calculator will help you to work out what you could be earning and our guides to contractor tax and expenses are the ideal way to get an understanding of your financial position.
For specialist advice on working as a contractor, our experienced accountants are always on hand to help you make the most of your income, so call now on 01442 275789 or email firstname.lastname@example.org for details of our low-cost packages.