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Do contractors really understand the tax they pay?

Do contractors really understand the tax they pay?

Contractor accountants may be interested in the latest plans to make UK personal taxation more transparent and easier to understand.

David Gauke, the exchequer secretary to the Treasury, last week laid down the Government’s vision for a simpler system.

It’s no secret that a lot of taxpayers find tax confusing and the Government has now said it wants people to be able to understand what they pay. In a discussion paper entitled “Modernising the Administration of the Personal Tax System” the coalition has set out a range of ideas to help people obtain access to information about their personal taxes.

The government wants to hear the opinions of taxpayers, tax professionals and representative bodies on a variety of issues. For example, the consultation asks which areas of the personal taxation system cause the most difficulty and how technology could be used to provide taxpayers with better access to their personal tax records.

As part of its plans to overhaul our tax system, the Government has also published a paper summarising the current state of play with regards to the integration of income and National Insurance. Technical working groups are currently being established to explore the possible options and employers, payroll and tax professionals are being invited to join these groups and provide their opinions.

David Gauke explained that the tax deduction on a payslip is the only way that people know how much tax they pay, but the Government wants to make the whole system more transparent so that people understand their tax rate, the amount they currently pay and how much they should pay.

It was a busy week last week as far as income tax related plans were concerned. The Government also published its draft Real time Information regulations, which it hopes will improve HMRC’s administration of PAYE.

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Image: 29/365 – Mattel MONSTER HIGH Series: “Gloom Beach” version Frankie Stein by puuikibeach

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