Man Working

HMRC has launched a public consultation into changes that it is proposing to the registration process for Income Tax Self Assessment (ITSA) for sole traders.

At the heart of the proposed reforms is the idea of getting both sole traders and buy-to-let landlords to register for ITSA earlier than they are currently required to do. Registration is how they let HMRC know they are eligible to complete a self-assessment every year, and the tax authority is suggesting that registering earlier could enable them to switch to Making Tax Digital more quickly.

Among the issues that it wants those involved in the consultation to evaluate are how best to make sole traders and landlords aware of the need to register; when exactly they should be required to do so in the aftermath of launching their businesses; and the costs and admin problems involved.

The confusion that surrounds self-assessment is why many sole traders and others affected use an accountant able to provide tax return services in Goole or wherever they happen to live.

HMRC is hoping to change the existing requirement to inform it of liability and replace this with a new obligation that comes into force as soon as an individual launches a business or lets out a property. It also wants to use the consultation to examine the possibility of deploying information from outside sources to identify newly self-employed people.

According to Accountancy Daily, Lucy Frazer from the Treasury said that the aim was to determine whether bringing forward the registration date would simplify processes.

    Get in touch

    Please fill in the form below to get in touch.

    I am happy for you to contact me