Government calls for evidence on new self-employed tax system

The government is calling for evidence on a new tax system for the self-employed, which would replace the annual self-assessment tax return with a rolling in-year structure.

The Association of Independent Professionals and the Self-Employed (IPSE) has welcomed the government’s ‘concern with the tax experience’ for the self-employed, but says that there are still ‘unanswered questions’.

Andy Chamberlain, Director of Policy at IPSE, explained, “We welcome the fact the government wants to improve the tax experience for self-employed people and we are keen to work with them on this. However, there are some unanswered questions about the proposal.”

“First, many self-employed people’s incomes fluctuate substantially throughout the year – and while the current annual system accounts for these and ensures self-employed people pay the right rate, it is not clear how this would work with rolling in-year taxes. It is also not yet clear how this would work with late payments – which are a substantial problem for self-employed people.

“We would want to be satisfied this proposal would not pile even more of an administrative burden on self-employed people. There seems a risk here that rolling administrative tax responsibilities could be added to the requirement to complete some form of annual tax return – which would eat even further into freelancers’ vital working time.”

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