Finance

The Top Five: What the Taylor Review says about tax

The Taylor Review of Modern Working Practices, published in July, has called for all work in the UK economy to be fair and decent. It looks at workers’ rights and responsibilities as new forms of work such as zero-hours contracts become increasingly widespread.

Making Tax Digital

Making Tax Digital (MTD) is the most radical overhaul of the tax system in a generation, and a key part of the government’s plan to make it easier for individuals and businesses to get their tax right. When it starts in April 2018, says the report, it will mean the end of annual tax returns for millions.

The gig economy

The review finds that 72 per cent of gig economy workers would welcome some sort of online tool to support them in paying the right tax. It says MTD would reduce the likelihood of avoidable errors and make the process of calculating tax liabilities easier.

Third-party vendors

According to the review, HMRC has begun working with third party vendors to encourage development of apps and software that could help small businesses, the self-employed and landlords comply with their MTD obligations.

Digital transactions

A move towards businesses using digital transactions to make payment for work instead of cash helps create a digital record when work is carried out, says the review. They also provide a clearer audit trail for HMRC to examine should an investigation be undertaken, and help address the tax gap of the hidden economy.

Consistent taxation of labour

The review also called for the taxation of labour to be more consistent across all employment forms, while at the same time improving the rights and entitlements of self-employed people.

 

This article was published in our Business Reporter Online: Unshackle yourself from tax.