Some freelancers I've talked to appear to be okay with the idea, while others are not too keen. I think it is going to be a bit of hassle at first but once it's all setup and working it should be a lot easier. Who knows what is going to happen though? This is the government we are talking about here.
In a move that is no doubt going to make just about every freelancers sigh in disbelief, it has just been reported, by HMRC themselves, that there will probably be a one-off transitional cost of £280 per business.
This includes freelance professionals, contractors, gig workers...you name it. If you are self employed then switching over to making tax digital and sending in your tax return 4 times a year isn't going to be free.
What seems to have happened is that HMRC did some kind of assessment about how making tax digital is going to happen, and they came up with the number of £280, which on average is what they think you will have to pay.
They did go on to mention that you should actually end up saving money...maybe, because while it is going to cost you a bit more initially, over time making tax digital will save you money. Let's wait to see what happens there.
I suppose you could say that paying more money upfront is not something freelancers want to do, and you could also say that having to do a tax return 4 times a year is also annoying to say the least, but, if you get yourself a good accountant then I really do think this is an opportunity to save quite a lot of money.
What I reckon is that because you are going to be doing tax 4 times a year you will become more educated about the subject of tax, which then gives you the knowledge to do more things to save money.
So when does this new tax system come into place anyway? While I am not sure exactly, there have been some reports they could start doing it by the end of this year, although it probably won't become something everybody has to do for another year or two.
As always, we will keep you updated right here on this blog, and if there is any more news about making tax digital and freelance professionals you will know about it first.
© 2016 All rights reserved. Reproduction in whole or in part without permission is prohibited.