Income Tax Self Assessment registration for the self-employed and landlords
Executive summary
Most AAT Licensed Accountants (85%) believe the current ITSA registration process is not well understood or only understood with the help of an accountant or other professional. Similarly, 45% of AAT Licensed Accountants stated that most taxpayers are unclear what trading is, with a further 35% stating "It depends, some are and some aren’t".
International examples of tax registration are worth examining, particularly Singapore. Several international examples are highlighted in our response, of which Singapore appears to provide the gold standard in terms of landlord registration.
AAT Licensed Accountants are evenly split 50/50 between keeping the existing notification period (or extending it) and introducing some form of shorter time period. This result demonstrates the difficulties HMRC is likely to face if it decides to proceed with reform in this area. There is not yet sufficient support for these reforms and as such a more powerful case still needs to be made, especially if HMRC wishes to follow its desired 2024 timeline.
An overwhelming 95% of AAT Licensed Accountants expressed a desire to register their clients for ITSA. This demonstrates a significant appetite for greater intermediary involvement and support for the registration process.
Related consultation responses
Simplifying and modernising HMRC's Income Tax services through the tax administration framework
AAT acknowledges that a digital by default approach is a sound principle, but the reforms risk the customer-facing element not being supported end to end.
Expanding the cash basis for the self-employed
AAT is not convinced the proposal will do much to encourage businesses to switch to the cash basis. There is ultimately not enough of a financial incentive.
Property income review: call for evidence
While we appreciate that a single tax regime for all types of lettings would be simpler, it seems reasonable that different tax regimes should apply to each.
