Tax returns! Fill them in FOUR times every year

posted by 4 years ago in News

Millions of earners across the UK including; those who are self-employed, small business owners and landlords will be forced to fill in their tax returns four times in just one year.

Currently small business owners and those who are self-employed must file their tax return by the 31st of October or they can submit it online by the 31st of January. Tax must be paid by the 31st of January. However, the new system means that they will have to file online once every four months just like the big firms do.

The aim of returning a tax form every quarter is to help small businesses align with the larger corporations, and to keep on top of their tax paperwork however, financial experts believe that this will add to the weight of the red tape that is already pulling some small businesses down.

Chas Roy-Chowdhury, of the Association of Chartered Certified Accountants has said;

“It is not just about filling in a form, it is going to be a real burden.

“Workers will have to make sure their books and records are up to date at least four times a year in case the taxman decides something is amiss and investigates them.”

Workers will not have to pay tax four times throughout the year however accountants believe that returns per quarter are approaching.

The announcement slipped through George Osborne’s autumn statement, the revelation means that approximately 4 million people will be affected (self-employed, small business owners and landlords – who make more than £10,000 a year in profit).

The government predicts that those who are self-employed should be completing their tax returns online by 2020. The beginning of the £1.3 billion ‘digital revolution’ that HMRC is expecting will launch the personal tax accounts for at least one million workers meaning that it will act in the form of an internet bank account.

Whilst adding to the issue of the red tape, and the recent announcement of the auto-pension enrolment there are more worries that countless small businesses could be fined if they miss the cut-off dates. According to HMRC two in five small firms are not capable of using the internet or need support when using the government’s services online. You could face a fine up to £100 if you are a day late.

John Allan, from the Federation of Small Businesses, has said:

“The annual tax return can be a major challenge and many smaller businesses still complete theirs manually.

“We believe the policy needs to be rethought. The push towards digital must be introduced alongside tax simplification and businesses should have a choice around the tax reporting process appropriate to them.”

Earlier this year, the ‘election manifesto’ took place which led the Conservatives to promise that they will withdraw £10 billion from the red tape, so that Britain can be the best place in the Europe to do business. David Cameron has said in the past small business owners are “heroes and heroines” and they act as Britain’s “life blood.”

A spokesperson at HMRC has commented on the issues by saying;

“Many taxpayers have told us they would like more certainty over their tax bill and we acknowledge that they shouldn’t have to wait until after the end of the year before being landed with an unexpected tax bill. That’s why we’re making it easier for them to update their tax information more regularly from 2018. We will ensure people have access to guidance and support where needed, including access to telephone filing.

“99% of businesses already file their corporation tax online and 98% of VAT returns are filed online. The new digital accounts simply integrate the different information businesses provide to HMRC into a simple, streamlined system.

“We are focused on creating a tax system that is more effective, more efficient and easier for taxpayers.”

Head of Businesscomparison.com, Philip Brennan as commented on the matter by saying;

“In reality, it should mean overall less time is spent on accounts as they will be kept in order. Rather than having to look for invoices from 12 months ago it will be 3 months. It will be interesting to see if HRMC have enough staff to deal with people calling in trying to work the new systems. As it is more frequent I think people will become more comfortable with the process meaning fewer will pay for external support.”