Paye-like experience for self-employed people?
Below is an extract from the latest report by the Office of Tax Simplification entitled “Simplifying everyday tax for smaller business” I do think that tax is far from an everyday issue for small businesses and I simply don’t recognise the term in relation to small businesses.
However, take a look at this paragraph:
“PAYE-like experience for self-employed people?
Tax can be a source of stress for the very smallest one-person businesses, and the need to set money aside for long periods to pay future tax liabilities can be difficult to manage financially. The OTS considers that there would be merit in exploring an optional PAYE-like experience for self-employed people.
Quite a number of the smaller businesses the OTS consulted in this review said they would welcome an optional process under which they could have an appropriate amount of tax deducted from their income each month. Technology is advancing rapidly and functionality that supports this could be available within a few years. The OTS has given initial consideration to how such a system could work for people who work for online platforms.6 The OTS envisages developing this thinking further and extending it to include self-employed people more widely.”
They are absolutely correct in that the smallest businesses do indeed find it difficult to put some aside for what can be a long time especially if circumstances change during the period.
I believe, we as Accountants can do more to help clients save for their liabilities than we do at the moment especially for the very smallest and the march of Tech especially challenger banks can help us identify potential liabilities sooner rather than later. This can help us point out the lack of saving activity and help us prod the client into action.
I am pleased that the OTS have used the word “Optional” and lets leave it at.Back