Freelancers' tax helper backs digital accounts
accounting firm that helps freelancers has come out in support of new digital
accounts for the self-employed, despite ongoing concerns from other tax advisers
FreeAgent says it is “glad” that Autumn Statement 2015 announced a £1.3billion investment for the digitisation of HM Revenue & Customs.
“The result should be a more efficient, streamlined HMRC that is also better able to focus its resources on chasing down genuine tax avoidance,” said FreeAgent’s boss Ed Molyneux.
“It’ll also dramatically reduce the burden of tax compliance - which is disproportionately shouldered by the very small businesses”.
HMRC’s digitisation, which includes digital tax accounts that sole traders will have to
update at least quarterly, throws up more questions than answers, according to tax
advisory Blick Rothenberg.
Speaking to the Financial Times, the advisory’s senior partner Bob Rothenberg asked: “Is this a precursor to accelerating personal tax payments where tax is not deducted at source…?”
this a boost for my profession, so that clients will need assistance with tax
return preparation quarterly? And what about those who are IT illiterate…will
they be able to cope?”
It is the actually the Revenue which might not be able to cope, believes James Moore, a business columnist for The Independent newspaper.
“To listen to George Osborne, by 2020 HM Revenue & Customs will have been transformed into a digital tax titan, an example for the world to follow. That’s right, the same HMRC that can’t even answer its phone calls.”
Mr Moore also wrote: “[The Autumn Statement has] sought to make HMRC’s life easier in some respects by (again) making us taxpayers do its work by, for example, getting small businesses and the self-employed to file returns online every quarter.”
However, not investing in digital resources for HMRC would simply be delaying the inevitable, suggested Mr Molyneux, whose firm provides accounting software tailored to freelancers’ needs.
Referring to tax administration, he said: “In a
world where everything – from shopping to banking - is done online or via
smartphone, this is an area which has been long overdue for reinvention.”