HMRC Looking To Speed Up Self-Assessment Registrations
Bringing registration dates into line ...
Posted by Helen Beaumont on 02/02/2022 @ 8:00AM
HMRC is requesting contributions on its plan to move the Income Tax Self-Assessment registration deadline closer to the start of any new business. Why do I feel this is a good idea?
It's good that HMRC are consulting on this rather than simply imposing their changes!
Any individual starting a trade or property business needs to give HMRC notice of their Income Tax liability by the 5th of October following the tax year in which the business commenced. This is for when the individual is not currently within the self-assessment regime. Where they are, they simply inform HMRC on their next Self-Assessment tax return covering the period the business started.
"Delays between starting to trade and notifying HMRC can be considerable, which is going to affect Making Tax Digital for Income Tax in future!"
Depending on the timing of your business starting and whether you were subject to Self-Assessment already, it could be nearly 2 years before you need to inform HMRC of your new business. You can see why they want to consult on changing it.
HMRC has stated that earlier registration for Income Tax Self-Assessment will offer more benefit to taxpayers as well as to themselves. They believe that interacting with the tax system earlier will form good record-keeping habits and give new Self-Assessment taxpayers far more time to plan their first payment.
"The UK Government would also benefit from a more accurate picture of the self-employed community!"
I understand why HMRC are doing this, but I can also see a considerable pushback from individuals who suddenly fall under the Self-Assessment regime so it's good that they're consulting on it rather than simply imposing their changes.
With MTD for Income Tax on the horizon and MTD for VAT underway, it's a sensible move from HMRC to think about shoring up this discrepancy and ensure everyone is in the same place.
Until next time ...
HELEN BEAUMONT
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about HMRC's consultation and how it may affect you, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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