Quarterly Tax Returns for Self Employed

Quarterly Tax Returns

Quarterly Tax Returns for the Self Employed from 2020 announced by the Government this week.

 

Quarterly Tax Returns

Quarterly Tax Returns bring accusation that the Government is over burdening the self employed with regulation following the Autumn 2015 statement from the Chancellor, annual self-assessment is coming to an end. Small Businesses are to be moved to quarterly tax returns from 2020, despite the fact that BIG business has recently dropped quarterly reporting.

George Osbourne said  ‘in the digital age, we don’t need taxpayers to pay for paper processing, we’re going to build one of the most digitally advanced tax administrations in the world. To enable everyone to be able to manage their tax account online’

Simon Baylis, partner at accountancy firm Moore Stephens, said: ‘You just know what’s going to happen if the self-employed are required to make quarterly tax returns and payments. Many struggle to do self-assessment once a year. There will be a huge penalty issue, with disputes over people being on holiday at the end of a quarter or being sick. It will be an absolute dog’s dinner and I am very worried about it.

Comments taken from the Daily Mail report.

Bearing in mind that  small businesses that are registered for VAT already complete a quarterly return, this new legislation will effectively double the administration work load for the self-employed and small business owners, I am a business mentor of some 4 years for the New Enterprise Allowance scheme (NEA) that takes people from unemployed to self employed and it is hard enough explaining the annual self-assessment system to them rather than quarterly reporting, I wonder how many of the inexperienced self employed will simply disappear, either ceasing to trade, or just not registering as self-employed. One can only hope that by making the taxation system digital, that the HMRC can finally get the taxation calculations correct.

We would love to hear your thoughts and comments on how Quarterly Tax Returns will affect your business, please feel free to comment below.