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HMRC takes pity on contractor VAT returns by relaxing rules

If I’ve said once I’ve said it a dozen times: sometimes Her Majesty’s Revenue & Customs comes through for contractors in a major and much appreciated way.

Apparently HMRC will be changing its VAT return policies especially for contractors and freelancers that are unable to file returns over the internet. This is a major departure from their online-only policy and is an offshoot of a tax tribunal that took place last October where three individuals said that they had physical limitations such as disabilities that precluded them from learning an online-only return system. The judge at the tribunal agreed that the online-only rules were too restrictive; what this means for the rest of us is that any company of any stripe – and that includes freelancers, contractors, and other self-employed Brits – will be able to do it over the phone or even file a paper VAT return once more.

This is of course great news for anyone who has either an inability to use an online VAT return filing system or simply one who doesn’t trust computers any farther than they can be thrown. And let’s be honest – with the weight and dimensions of the newest laptop computers, you can’t toss one of those remarkably far unless you wind up like an Olympic discus thrower. Personally I think this is a great victory for those of us who feel that the taxman has gotten a bit big for its britches, especially when it comes to the online-only filing. It hasn’t been that long since the whole Real Time Information filing requirements for PAYE went live, and we all know how that’s been going over (hint: much the same way a lead balloon would go over). HMRC has already provided leniency for many firms when it comes to RTI – especially those who can’t handle the new electronic payroll transmission requirements – so I don’t see how the VAT return filing problem is much different.

Whatever the result – and regardless of whether it was court-ordered by a judge or if it came down from the tax authority directly – I’m chuffed to bits that everyday taxpayers like you and me are getting some support from HMRC. Let’s hope things keep going in this vein and that it doesn’t end up reversing itself and trending back towards kicking taxpayers in the bollocks and then rifling through their wallets.

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