Self-employed people, particularly those in new online sectors, submit a tax return each year but many would prefer to pay more regularly.
Government tax advisers are consulting the self-employed on modernising the system to reflect new ways of working.
The Office of Tax Simplification, an independent division of the Treasury, is reviewing tax reporting and payment arrangements amid concerns that the rise of the gig economy has left the self-employed struggling with tax compliance. It believes there is an appetite for a system that makes tax for small business owners and the self-employed closer to that of those under PAYE.
Most self-employed people submit a tax return each year but the OTS says it has been told by freelancers, particularly those using online platforms to find jobs via the gig economy, that they would like the option to report information and pay tax periodically, or on the completion of jobs.
The OTS said that it was looking to explore “options for information reporting or payment of tax to take place closer to real time”.
The office believes that the “system does not handle the fluidity of the modern workplace very well, for example in relation to . . . individuals holding multiple jobs or concurrent employment or self-employment”.
The office could propose a HM Revenue & Customs mobile app to help workers manage their tax affairs on the go. It will also consider the position of people receiving rent from letting residential properties.
The office says tax policy for small business proprietors is due an overhaul, describing rules as a “complex patchwork”. Views are sought by August 30.
This is the main driving force behind the development of The Drivers Tax App.
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