Government claims tax plans not as bad as contractors feared
Plans to change the way self assessment tax returns are submitted have caused significant uproar amongst the self employed population as they are concerned about increasing admin costs and the time that it will take to complete the quarterly updates to their tax records.
The government has defended their plans, possibly as a result of the 100,000 signature petition that was submitted to them, and they say that the new system would not be equivalent to completing four tax returns a year. They have stated that the proposals which are scheduled to kick in in 2018 are fundamentally different from the current incarnation of the self assessment system, and will not be anywhere near as complex.
One of the major differences is that the new system will be quicker because the updates will be automatically generated from the existing digital records of the businesses in question and therefore should require little or no data entry or editing in order to ensure that it is all correct.
Another change will be the way in which sanctions are applied. In their reply to the petition, HM Revenue and Customs reassured taxpayers that they would be performing a complete overhaul of the mechanisms by which late payers and those whose tax returns contain errors or inaccuracies are fined.
The final significant difference that self assessors should notice is the fact that the new method of assessment will supposedly provide them with more information about their tax position throughout the year. They will be able to access information about how much tax they owe as they go, rather than getting a calculation once they have completed their yearly accounts, meaning that surprising tax bills should be a thing of the past.
There are still concerns about online security, the availability of options for those who are unable to use digital tools and the work involved for businesses whose record keeping systems are incompatible with those used by HMRC. Whether these will be addressed to the satisfaction of their critics has yet to be seen.
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