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With HMRC making the announcement that Making Tax Digital (MTD) is to be extended, there are some concerns coming from professional bodies.

The Association of Independent Professionals and the Self-Employed (IPSE) has warned that the government must not make MTD cause tax to be even more complicated for contractors.

Andy Chamberlain, Director of Policy at IPSE, explained, “In pushing ahead with Making Tax Digital, the government must make sure it does not make tax even more complex for freelancers. In the plans for extending MTD, the government announced that it would consider making tax reporting more frequent.”

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He added, “Although this would give the government a more accurate view of incomes, for freelancers, for whom every minute of admin is valuable earning time lost, this could be a significant added burden. The aim of MTD is to make tax simpler for taxpayers and HMRC: it’s not clear to us how more frequent reporting will achieve this.

“It is also right that the government has given advance warning to allow businesses to prepare for the changes to MTD, but it must make sure less technologically literate freelancers have support available if they need. Unlike bigger businesses, freelancers will not have accounts departments that can manage this for them, and many don’t have their own external accountants either. Freelancers are everyone from IT contractors and project managers to plumbers and hairdressers: government must make sure all of them are supported through these changes.”

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