HMRC has carried out a consultation looking at potentially increasing the frequency of tax payments that could have the self-employed paying on a monthly or quarterly basis.
As a result of this, the Association of Independent Professionals and the Self-Employed (IPSE) has conducted its own research looking into how this might impact the self-employed.
Of those surveyed by the IPSE, 39% said that paying taxes more frequently would leave them less able to cover unexpected costs – 34% were concerned that increasing the payments to a monthly or quarterly basis would lead to hidden HMRC or interest charges.
A significant 72% said that they would struggle with the burden of having to spend more time sorting out the administrative side of tax payments.
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Email JaimeAndy Chamberlain, Director of Policy at IPSE, said, “HMRC is consulting on possibly making self-employed tax payments – income and corporation tax – more frequent.
“Some freelancers can see benefits to this proposal: 42 per cent of sole traders and 30 per cent of company directors felt it would reduce the stress of paying a large tax bill. On the whole, however, it seems freelancers think this would be much more hassle than it’s worth – and could even leave many out of pocket.
“The biggest worry across the board is admin burden: unsurprisingly, most freelancers think they would struggle with having to go through the already arduous process of self-assessment every month or even every three months. This is, quite simply, time when they could be making money.”
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