Report and pay as you go by self-employed workers?

The Office of Tax Simplification (OTS) has set out the scope of its latest project, Scoping paper: simplification of tax reporting and payment arrangements for the self-employed, which will consider easier ways to report taxable income by the self-employed and landlords of private residential property. The work will look at whether the processes involved could be made easier to understand and improved and builds on earlier work where the OTS considered the impact of the platform economy on how people manage their tax.

Some gig workers who had found most of their work through platforms suggested they might prefer to have their tax deducted by the platform as they went along, using something looking like a PAYE system. Some workers rarely, if ever, use cash in their businesses, while others use it extensively so clearly, one size of tax system does not suit all and the possibility of doing things differently might be feasible.

The OTS Technology discussion paper published in January 2019 considered how new technology could be used to bring efficiency and cost savings to the tax system and suggested more use could be made of the current Personal Tax Account.

The Tax Faculty is immediately mindful that Making Tax Digital (MTD) for income tax is still moving in the background and it will be essential that any further developments affecting small businesses are made in conjunction with MTD, allowing enough time for the rules changes, the IT systems changes and for human beings to keep up.