Campaigners for low-paid regret missed opportunity to help self-employed - LITRG Press Release
The LITRG are disappointed to see nothing in today’s Autumn Statement to help taxpayers, especially the self-employed, to pay their taxes according to a flexible timetable.
Currently taxpayers in self- assessment, including all of the self-employed population, pay their tax liabilities in lump sums in January and July each year. Indeed, from April 2015, Class 2 National Insurance liabilities, often paid monthly at the moment, will be paid along with the January tax liability.
Bunching tax payments into lump sums like this can make it difficult for taxpayers. Besides, under Universal Credit, self-employed claimants whose earnings are low in January and July might become subject to the Minimum Income Floor and have their credit restricted, simply because of the way the tax liability falls. As a result, the claimant will receive less Universal Credit than they would have done had the tax bill been paid in smaller amounts.
Anthony Thomas, chairman of LITRG said:
“We have campaigned to allow taxpayers to pay their tax bills more flexibly. Although at the moment taxpayers can make arrangements with HMRC to spread their payments, this requires them to pay their liabilities in equal instalments. This can be very difficult for the self-employed to do because often they receive large payments from customers, followed by weeks or months of little income.
“It is very disappointing that the introduction of this flexibility appears to have been dismissed – especially as it might enable more taxpayers to comply with their tax payment obligations, benefitting both them and the Exchequer.”