IPSE has successfully called for the timetable of MTD to be delayed and continues to campaign against the implementation of quarterly reporting
We work closely with HMRC to make sure that the self-employed are represented and considered in their plans for the digitisation of the tax system.
Delaying the rollout of MTD for the self-employed
Making Tax for Income Tax Self-Assessment (ITSA) was first announced back in 2015. It was initially going to spearhead the MTD revolution – which is still very much HMRC's end-goal - where all tax will eventually be ‘made digital’, but there were teething problems and IPSE has consistently criticised the overly ambitious timetable.
Government has since listened to these calls from IPSE and others and delayed the MTD for ITSA timetable on four separate occasions.
MTD for ITSA still isn’t here, yet, and while it is almost certainly coming, exactly what it will entail – and who will be affected - is still not entirely clear.
Whilst MTD for VAT was introduced in 2019, MTD for ITSA is more complicated. It impacts more taxpayers, some of whom may have difficulty complying, and, under the original design at least, it comes with additional requirements.
IPSE continues to work closely with HMRC on various stakeholder groups and uses this platform to remind HMRC of the additional burdens some of these new requirements could place on the self-employed.
Quarterly reporting
Instead of submitting just one annual tax return, HMRC is wanting to implement a system where taxpayers would be required to provide quarterly (or more frequent) updates to HMRC.
IPSE continues to call for HMRC to rethink mandatory quarterly reporting. The push toward digital does not need to be accompanied by additional reporting burdens that only benefits the Revenue.
Some businesses might want to provide more regular updates, so they can more readily understand their tax liabilities in-year for example, but we know that other businesses do not need this. For them, the quarterly updates will act as another set of deadlines, which they may miss and, presumably will incur penalties if they do.
We continue to push government to drop the quarterly update requirement, with IPSE's research on this revealing that contractors are overwhelmingly concerned about the additional burden this could place on their businesses.
Read the latest articles on MTD from IPSE's Policy Team
Rising costs: Making Tax Digital set to place extra pressure on self-employed
IPSE's Fred Hicks analyses what the latest update to Making Tax Digital for Self Assessment means for its impact on the self-employed and why the March Budget presents a timely opportunity to soften the blow.
Why there’s still unanswered questions surrounding Making Tax Digital
IPSE's Director of Policy, Andy Chamberlain, highlights the unanswered questions surrounding the long-delayed rollout of Making Tax Digital for self assessment.
IPSE's research on in-year tax calculations
A question of time: how often should freelancers pay their taxes?
Read IPSE's latest research looking at the views of contractors on the possibility of moving from retrospective to in-year calculations, as well as the benefits and challenges of the current tax system.
Read the full report
Read: IPSE's guide to Making Tax Digital
For more information on the current timetable of MTD and the potential software requirements, read IPSE's Making Tax Digital Guide.
Read the guideIPSE's submission to the Public Accounts Committee
Read IPSE's written evidence on MTD to the Public Accounts Committee ahead of a committee evidence session with HMRC.
Read the submission
Where next?
We have dedicated advice pages to help your physical and mental wellbeing whilst working from home but also on areas such as winning work or navigating the tax system. And to help and support you through all the challenges that can come with becoming self-employed, from chasing late payments to being able to work through power cuts and other emergencies.
View all advice pages
Physical wellbeing advice
Running a business, or freelancing and contracting for clients, can be busy, stressful and all-consuming, but Ignoring your health and wellbeing can have serious implications for you, and your business.
Mental wellbeing advice
We've put together a set of resources and guides to support positive mental wellbeing for the self-employed, combing our business knowledge with tips and advice from mental health and wellbeing experts.
Winning Work advice
Tips and advice to help you grow your business no matter what industry or sector you work in.
IR35 advice
Off-payroll working rules, otherwise known as IR35 or the intermediaries legislation, is a damaging taxation law from HMRC that IPSE strongly opposes.