UK Government Announces Simplified Tax Regulations Reporting
For self-employed and small businesses, the UK government has announced reforms to the tax system that will make it easier to fill out their returns
The most challenging aspect of filing for tax returns is complying with the regulations. Self-employed workers are required to pay their tax costs through self-assessment tax returns. Filling out forms, collecting bills, and accounting for the financial data is not pricey to make it ready for submission.
For small businesses and freelancers, this process of filing can affect their bottom lines significantly. To simplify the process, HMRC has announced reforms to the tax reporting system that makes the process easier for moderate-income groups to fill out their returns. This move is also aimed to reduce the rate of tax avoidance and minimize errors in the final reports submitted.
Here are the three major reforms:
- Reporting mandate change for self-employed and small businesses
- Measures to identify promoters of tax avoidance. HMRC to be given shut-down powers, if necessary.
- Publishing highlights of research on Making Tax Digital (MTD) for VAT-registered businesses
These changes are likely to be implemented in 2023 and are devised after consultation with representatives of small businesses.
Under the currently existing system, tax returns filed by the self-employed, proprietors, and small business partnerships are based on accounts ending in the tax year. More complex rules apply when a business starts and enters its reports on a different date than the tax year’s end. In those cases, tax is paid for the first annual year and then in subsequent years. This means that twice profits are taxed, and complex rules will have to be used to relieve the double taxation.
It is the right time to analyze your internal regulatory reporting process with all these regulations coming in. If you haven’t considered it yet, DataTracks can simplify your compliance needs. Learn more about DataTracks and its solutions for HMRC regulatory compliance and reporting or write a mail to us at email@example.com