August 17 ,2016 | by Hari Sri

Pay as you go to be ready in 2018, HMRC announce

_Content

HM Revenue and Customs (HMRC) has announced that its pay-as-you-go tax system for landlords and sole traders will be up and running from April 2018, in what could be an innovative development for tax payers.

The plan is to allow businesses to employ a digital tax account in order to estimate their liabilities and make a payment. This will make it easy for HMRC to allocate the funds directly from their accounts when their taxes are due.

Expansion

The system would also make it easier for overpayments to be returned more promptly, and would allow businesses to reclaim payments on account.

The scheme, which is known as ‘Voluntary PAYG’, is set to apply to all unincorporated businesses, landlords and sole traders, and will include income tax, National Insurance contributions and capital gains tax from April 2018 and VAT from April 2019. There are plans in place to expand the system to all incorporated businesses from 2020.

Cash rewards

HMRC stated that under this system, the customer will be able to make the decision on what to pay and how often, rather than having to abide by fixed time intervals. Voluntary payments will remain on their account, and unused credits should be carried forward.  

The government institution is also planning a series of measures to encourage businesses to take up the system, including paying interest on credits, streamlining its own security processes, and even promoting cash rewards. 

Hari is the LSBF Blog's News Editor. He manages the editorial content on the blog and writes about current affairs, SME, entrepreneurship, energy, education and emerging market news.

Share on Facebook Share on LinkedIn +1
There are no comments posted yet. Be the first one!
Please write your comment, minimum length 50 characters
Please insert your name
Please insert a correct email address
We couldn't process your comment, please try again later