Not four returns a year?

Making Tax Digital

WE NOW HAVE more detail on the £1.3 billion plans by Her Majesty's Revenue & Customs (HMRC) for "Making Tax Digital."

HMRC's old-school analogue head office © Matt Salusbury

HMRC's old-school analogue head office in Whitehall

After a Parliamentary Petition calling on the Government to "scrap plans forcing self-employed and small business to do four tax returns yearly" gathered 103,000 signatures in five weeks, the government responded at the beginning of January.

The response sought to reassure petitioners that Making Tax Digital, which was announced in the March 2015 Spending Review, would not mean "four tax returns a year," which initially seemed to be on the cards.

The self-employed will instead be expected to provide the HMRC with "quarterly updates", which will be "largely be a matter of checking data generated from record-keeping software or apps and clicking 'send'."

Unspecified "software or apps" are mentioned, which it is claimed will make it an easier, "light-touch process," they assure us. We still don't know the scheme will finally turn out.

So far it seems to be based on the assumption that the self-employed are all registered as companies and all do our own VAT.

It also assumes all freelances do our accounts and banking online and we are all happy to use potentially risky internet-based "cloud accounting" systems, exposed as they are to security breaches, fraud, and to disasters involving government IT projects. Watch this space.

Last modified: 15 Feb 2016 - © 2016 contributors
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