If you are an umbrella contracting professional then you are no doubt aware that income tax is about to change…by going digital.
More specifically, we are now going to see a new system implemented where you will file your tax returns online quarterly.
Since this was announced most people in the contractor community have been against the idea, but there are some contractors that seem to be looking forward to the new digital way of doing things.
The main problem with the system is that doing a tax return 4 times a year is simply too much, and for many self employed people it will take them away from their business for many valuable hours that could be better spent elsewhere.
I’m always willing to listen to other opinions though, and while it appears that many out there who are against it, there are some that are actually looking forward to digital tax.
Why you might be wondering? One of the main reasons that I’ve been hearing is that by doing a tax return 4 times a year it’s much easier to keep track of all your legitimate expenses and then claim for them.
For example, a recent survey showed that over 50% of contracting professionals don’t typically put down low value costs on their tax return.
However, now that they have to do it 4 times a year, this might just be the excuse they need to start recording everything, which ultimately means they will end up paying less tax.
Another reason why the new digital tax system might be good for your business? Let’s face it, there are many people out there who rush around at the same time every year trying to get their tax returns in by the deadline.
It’s similar to how people leave their Christmas shopping right to the last minute, and then go out on Christmas Eve at 5pm in a mad dash to find whatever they can.
Imagine if we had Christmas 4 times a year though…don’t you think that would make people more organised when it comes to shopping for presents? I think it would, and the same argument can be made about doing tax returns. The more you do it, the better and more efficient you become.
Still not convinced? Same here, but if you need another excuse to like the new digital tax era then how about this…it gives you a reason to finally get rid of that useless accountant that gets everything wrong each year, and instead, start searching for an accountant that specialises in doing tax returns for umbrella contractors.
Make sure you choose a good one, because you are going to need them 4 times a year now rather than just the once.