LETTERS sent by the Taxman as part of its campaign to target private tutors could burden educational establishments, a tax protection firm has claimed.
The HM Revenue & Customs’ letters have been sent to language schools, distance learning companies and other colleges. They call on the organisations to provide the Taxman with details of “gross payments made for teaching, lecturing, tutoring, examining and invigilating, from which no PAYE tax has been deducted, for the years ended 5 April 2009, 2010 and 2011.”
The colleges are asked to provide the name of the person, their address, the total amount paid and whether or not it included VAT and a description of the services provided by the individual. This will only apply to individuals who had been paid more than £1,000 in a tax year.
Guy Smith, senior tax consultant at Abbey Tax, said that this could potentially burden larger groups. “One of the companies that received letters has 150 colleges, so it is an awful lot of information they have to provide,” he said. “For the distance learning colleges, it will take some effort.”
There is also a concern that HMRC will use the information it gathers to scrutinise the employment status of the individuals, which will affect the companies themselves, added Smith.
Making Tax Digital will impose significant additional tax compliance costs on small businesses for little or no medium term benefit, tax and small business experts told MPs
MHA MacIntyre Hudson has partnered with cloud accounting software provider Xero ahead of the government’s requirement for digital records
The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin
Does Darwin's theory apply to taxation? Colin ponders...