Self-employed tax reporting and payment

AAT acknowledges the rapidly rising numbers of self-employed workers entering the UK workforce; that the tax system has failed to keep pace in many respects, IR35 for example, and that it is sensible to also consider tax payment and reporting requirements in this context.  

Only a limited number of AAT licensed members expressed an interest in this area and those that did expressed a largely negative view of these proposals.  They were concerned by the additional complexity this might bring and the associated time and cost implications.  

Different approaches for different sectors has a logical appeal, happens in other areas of the tax system and is the approach adopted in several other countries.  However, this will result in inevitable complexity and may undermine the original simplification objective of the concept.  

There is undoubtedly some merit in terms of increased compliance and a likely reduction in the tax gap from such changes.  

As a UK focused professional body, AAT is not familiar with many international examples of tax reporting and payment systems for the self-employed.  However, the examples of Australia and the United States provide some useful food for thought.