Time for the uber tax collector? | John Steveni | LinkedIn

Collecting taxes from self-employed internet entrepreneurs, though, is another task altogether.

Until now, collecting (and policing) employment taxes has been the responsibility of employers. It’s a system that has worked well for just over 70 years –  John Steveni:

For one thing, PAYE is relatively clear – you work, you earn X, you pay Y in taxes. Internet trading is less clear – for example, people must understand the line between buying and selling for personal use and commercial trading. If the current model continues, HMRC will increasingly have to rely on the efforts of a growing number of self-employed.

So what can HMRC do? Buried deep in its Budget overview document is a clue – a small section called ‘tackling the hidden economy’.

The section promises legislation that ‘will extend HMRC’s powers to acquire data from online intermediaries and electronic payment providers to find those operating in the hidden economy.’

The hint is that this may be about tax evasion, but I think it goes further. HMRC needs to find a new model for tax collection that mirrors the efficiency of PAYE – and asking the various service platforms to contribute to that looks like a potential option.

They already collect lots of data from their members, so tracking what has been bought and sold, as well as expenses incurred, shouldn’t be too difficult.

Read more detail in: Time for the uber tax collector? | John Steveni | LinkedIn

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