Tax & admin · 17 March 2016

The Budget 2016: HMRC to offer pay-as-you-go tax option to self-employed

pay-as-you-go tax

Freelancers and contractors will be able to opt for pay-as-you go tax payment from 2018, following changes outlined in the chancellor’s Budget 2016 speech.

Writing in the document, George Osborne argued that making such payments would enable them on a voluntary basis to choose payment patterns that suit them and better manage their cashflow.

The move comes as part of the government’s transition to a digital tax system that will oblige self-employed individuals to provide HMRC with quarterly updates on their earnings and expenditure.

The newly unveiled public finance plans also include a commitment to invest an additional 71m in the tax authority to improve the service it provides taxpayers. The money will mean that HMRC is able to recruit 800 additional employees and offer a seven-day service by 2017.

Tax and tax credit phonelines are to open on Sundays, while a new dedicated line for new businesses and contractors will be provided to ease the transition to what Osborne promised in his Autumn Statement would be the most digitally advanced? tax system in the world.

The Federation of Small Businesses (FSB) applauded the announcement. The organisation’s policy director Mike Cherry said: Additional resource for HMRC to create a seven day a week service and a dedicated line for small businesses and the self-employed is welcome, as is the plan for every small business to have a named agent to deal with.



Hannah Wilkinson is a reporter for Business Advice. She studied economics and management at Oxford University and prior to joining Business Advice wrote for Kensington and Chelsea Today about business and economics as well as running a tutoring company.