Self-employed ask Chancellor for tax simplification over tax cuts

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  Posted by: electime      25th October 2021

Support with tax dominates the Budget wishlist for self-employed people in the UK, with over half of self-employed people hoping for changes to taxation rules.

Simplification of existing tax rules to make them easier to understand and comply with was the most wished for amend for the Winter Budget (29 per cent), while a lower tax rate for the self-employed was a close second (27 per cent).

The survey of 500 self-employed people from across the UK was commissioned by online self assessment tax return software GoSimpleTax. It also showed that 22 per cent said they would like to see Rishi Sunak announce more support for self-employed in the form of grants.

“Next week’s Budget presents a huge opportunity for the Government to show support for self-employed people in the UK to make it easier for them to know where they stand,” said James Cryne from GoSimpleTax. “The Covid-19 pandemic presented us with a once in a generation opportunity to tear up the status quo and simplify tax law in the UK, accelerating the move to digital record keeping to make it fit for the 21st Century yet it has caused delays to Making Tax Digital causing even more confusion for people.”

In fact, 43 per cent of those surveyed are not even aware of the change to self assessment for self-employed and landlords, which will require real time quarterly reporting from April  2024, known as Making Tax Digital for Income Tax Self Assessment. Many groups are concerned that Making Tax Digital will add another burden for self-employed people, but most are just looking for clarity on next steps or need guidance.

“Self-employed people represent an enormous percentage of the working population in the UK and they’re shouting out for more help in understanding and managing tax. If the Government wants to make tax manageable for all and to reduce errors in self-assessments, an announcement of simplification to the tax process would be an ideal first step,” he added.

There are over 4.3m self-employed people in the UK, representing 13 per cent of the total working population. A huge 83 per cent of survey respondents said they expect to remain in self-employment for the next 12 months, citing flexibility and the ability to be their own boss as key advantages. However, managing cash flow, maintaining a base savings level and lack of ability to pay into a workplace pension were highlighted as the main drawbacks of self-employment.