Quarterly tax returns could be on the horizon
Self-employed workers, landlords and small business owners are all faced with the prospect of having to fill out four tax returns every year.
Filing accounts quarterly will bring small operations, who currently only have to send their accounts to HMRC once a year, into line with large corporations. Some believe that the extra administrative burden could be harmful to taxpayers but we believe that Umbrella.co.uk accountancy customers will fare better than most.
The plans, which were only recently discovered having been slipped into the small print of George Osborne’s Autumn Statement, will affect around four million Britons.
Many self-employed workers and small business owners still like to file a physical tax return which has to be done by October 31st. The deadline for online tax returns in the 31st of January.
However, with many of HMRCs services going digital, it seems like the government expects more taxpayers to file their returns more regularly over the internet.
The ‘digital revolution’ at HMRC got off the ground last week with the launch of online personal tax accounts.
By April of next year it is hoped that every personal taxpayer and small business will have one of these accounts.
HMRC and the government believe that they will make taxation more efficient for smaller operations, helping stop the build-up of tax due and refunds owed.
Ruth Owen, director general of personal tax at HMRC said: “The launch of personal tax accounts is a groundbreaking development for HMRC and our customers.”
She continued: “Remember when you started banking online? Well, this is the equivalent shift in service for the majority of our customers wanting to do business with us online.”
Neil Armitage, Operations Director at Umbrella.co.uk, believes that the changes will be resisted at first but ultimately make life simpler for Umbrella Accountancy customers.
He said: “Nobody likes tax returns and I am certain that no one will welcome the prospect of having to do four a year, but I honestly believe that this change, as well as the online tax accounts, will help our customers maximise their tax efficiency.
“Speaking to freelancers and business owners it’s clear that keeping track of receipts and invoices is the worst part about tax returns – but if you’re doing this every three months then there is less to pull together at the end.
“I think these changes will be welcomed by many of our customers, particularly those using our cloud accounting services like FreeAgent or Xero. Filing tax returns on these systems is as easy as pressing a button.”