Digital Tax System for Small Business Owners: Boon or a Threat?

pay-as-uu-go

HM Revenue & Customs is launching a digital tax system which is voluntary with a ‘pay-as-you-go’ motto. The tax regime is designed and developed as a budgeting tool to promote and help businesses, landlords and even self-employed. However, experts have warned that this system could prompt people whose income is not certain. It can ruin their cash flows as it comprises of advance tax payments. Many have been seen in doubts over how the administrative and IT system of HMRC could struggle to handle and resolve problems which are caused when people have been seen attempting their tax process digitally. According to the deputy director of policy at self-employed workers, Andy Chamberlain, if the independent people are persuaded then this could make their lives easier and less complicated. He also added that it is not necessary to pay the tax in advance. While the policy officer of Federation of Small Businesses, Ben Baruch added that business generally welcomes a so-called concept of more efficient taxation.

pay-as-uu-go

According to the deputy director of policy at self-employed workers, Andy Chamberlain, if the independent people are persuaded then this can make their lives easier and less complicated. He also added that it is not necessary to pay the tax in advance. While the policy officer of Federation of Small Businesses, Ben Baruch added that business generally welcomes a so-called concept of more efficient taxation. But paying tax in advance “may mean a small cross section of businesses pay into these accounts at the wrong time, because their cash flow is difficult to forecast.” He also stated in addition, that the tech-savvy owners of the small businesses welcome and accept the voluntary tax payments through certain smartphone apps. But many will oppose to surrender their account or the helpline of HMRC’s support team.

pay-as-u-go

However, in a statement HMRC mentioned that their research and earlier informal consultation exercise states that “businesses have a real appetite for more flexible payment options”. But one of the members of ICEAW, Anita Monteith expresses that she is in doubt that HMRC designs might not cope up with all sort of complications. In the meantime, bodies of accountant have generally opposed to the digital and mandatory taxation. One of the members of the trade body ACCA, Chas Roy-Chowdhury said that it should definitely be “scrapped“. He was in fear that this pay-as-you-go might have replaced the compulsory version.

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