Originally written by Timothy Adler on Small Business
One million of the UK’s 4.5m self-employed face having to prepay tax bills higher than what they actually earned this year.
Many freelancers pay self-assessment tax bills on account twice a year, with the first prepayment falling due this January.
This is despite the Covid pandemic decimating many self-employed profits since March.
>See also: MPs to fight Sunak over move to hike national insurance for self-employed
The problem is that prepayments are based on the previous year’s profits, in this case what the self-employed earned in 2019-20 – before the pandemic hit.
TaxScouts, an online self-assessment tax service provider, estimated 1m people could be hit with an inflated tax bill because payment on account is based on the previous year’s earnings.
“While this is well and good in normal times, it doesn’t take into consideration the huge loss of earnings that so many of the self employed will have faced during the pandemic,” said TaxScouts.
However, anticipating the problem, HMRC has allowed the self-employed to defer payment on account and to request a reduction in their tax bill if they are facing financial difficulty and know their earnings will be down.
>See also: MPs urge Government to do more to help
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1m self-employed face having to pay tax bill larger than what they earnt
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
One million of the UK’s 4.5m self-employed face having to prepay tax bills higher than what they actually earned this year.
Many freelancers pay self-assessment tax bills on account twice a year, with the first prepayment falling due this January.
This is despite the Covid pandemic decimating many self-employed profits since March.
>See also: MPs to fight Sunak over move to hike national insurance for self-employed
The problem is that prepayments are based on the previous year’s profits, in this case what the self-employed earned in 2019-20 – before the pandemic hit.
TaxScouts, an online self-assessment tax service provider, estimated 1m people could be hit with an inflated tax bill because payment on account is based on the previous year’s earnings.
“While this is well and good in normal times, it doesn’t take into consideration the huge loss of earnings that so many of the self employed will have faced during the pandemic,” said TaxScouts.
However, anticipating the problem, HMRC has allowed the self-employed to defer payment on account and to request a reduction in their tax bill if they are facing financial difficulty and know their earnings will be down.
>See also: MPs urge Government to do more to help
Hot Business News Today
Support for tourism, hospitality needs to be extended, says Ed Milliband
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Economic support for those small business sectors hit hardest by coronavirus needs to be extended once Britain emerges from lockdown, says Ed Milliband.
The shadow business secretary said that travel, tourism and hospitality will need extended help from Treasury even as the rest of the country opens up again.
Milliband, speaking in a Zoom conference call hosted by accountancy software firm Intuit, said: “Economic support must match the lockdown exit strategy. The support needs to go on for longer if lockdown goes on for longer. If you lift lockdown too early, the implications for the economy and for the country would be disastrous.”
See also: Small business minister trying to help owner-directors hit by coronavirus
Shadow chancellor Annelise Dodds, speaking on the same call, echoed Milliband, saying that those small businesses in the travel, tourism and hospitality sectors could face disruption “for years”, and that there needs to be an ongoing system in place to support them.
Ed Milliband also voiced support for the furlough scheme to be softened so that small business employees could do some work even while furloughed, while the country drifts back to work.
‘Small businesses are in the frontline of this crisis’
Many small businesses