New guidance tool coming for business owners to understand their tax

It was announced in the recent Budget that a new interactive tool will be available in the summer to help the self-employed understand their tax position by providing specific information for their business.

Responding to this, the LITRG believes that online tools that aim to help users make tax-related decisions are helpful, provided they are implemented wisely and that they supplement, rather than replace, existing guidance.

Victoria Todd, Head of LITRG, explained further, “We welcome any accurate guidance which improves the understanding of the tax system and encourages people to get their tax right. Most self-employed taxpayers want to get their tax affairs right but are often daunted with where to start with their business accounts and completing their tax returns, especially if they are on a low-income and cannot afford professional advice.

“We hope that the tool will be launched in time to help the self-employed complete their 2019/20 tax returns, however the most important thing is that the tool is fit for purpose. In our experience, such tools are only as good as the questions asked and answers given and so care needs to be taken in development.”

The LITRG believes that it is vital that the purpose and functionality of the online tool is clear to the self-employed user. This means that:

• Any limitations should be clearly explained.
• A list of what is needed to complete it should be provided up-front (as often tools cannot be saved during their use).
• Box entries require proper explanation with easy-to-understand language so that users are supported to give accurate answers.
• Users should be able to obtain a copy for their records – for example by automatically receiving a copy by email (being prompted to print or save a copy would also be helpful but may not always be possible, e.g. if the form has been completed at a voluntary online centre). This could be important evidence in the event of challenge by HMRC, or in a Tribunal case where the user has relied on the guidance given by the tool.

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.