Contractors and freelancers appear to be getting more savvy with contract accounting, with HM Revenue and Customs (HMRC) reporting record numbers of self-assessment forms filed by midnight on January 31st.
According to the tax body, more than ten million returns were received before the deadline last month, smashing the previous year's total of 9.61 million.
What's more, the record for the number of returns filed online was also broken, with 8.48 million submitted to HMRC over the internet, compared to 7,93 million in 2013.
The figures represent 84.5 per cent of all returns received, making it a good result for HMRC.
Additionally, of the 10.74 million 2012-2013 tax returns due by January 31st, 93.4 per cent met the deadline. This is the highest percentage ever recorded and suggests efforts to raise awareness among contractors and freelancers are paying off.
Indeed, self-employed professionals are constantly encouraged by HMRC to get on top of self-assessment.
Accounting services are also crucial in helping contractors understand what they need to do to comply.
However, people are still leaving submitting their returns until late. On January 31st - the deadline day - 569,847 forms were filed, making it the busiest day for online returns. The busiest hour was also relatively late in the day - between 16.00 GMT and 15.00 GMT. During this time, 45,706 returns were submitted, at a rate of 12 per second.
There were even those that left it until the 11th hour -literally - filing their online return between 23.00 GMT and 00.00 GMT.
For those that failed to submit their return on time, a £100 late-filing penalty will be imposed.
Contractors would do well to embrace online filing, as HMRC is working to turn all processes digital.
In November, the tax body launched a consultation on making self assessment completely paper-free.
Under a paperless system, HMRC would send electronic communications to taxpayers and contractors would send information to the department online.
The reforms will require changes to be made to existing tax legislation and customers using the self assessment online portal will be allowed to give their consent to receiving electronic correspondence from HMRC.
This way individuals will receive a message in their mailbox and be able to view documentation via their personal HMRC online account.
David Gauke, exchequer secretary to the Treasury, said: "HMRC’s Digital Strategy will make processes like self assessment faster and simpler. It will deliver the tax system for the 21st century that taxpayers expect."
All digital communications will be treat with the same legal status as paper notifications.
Tests of the paperless system are expected to begin at the start of the next financial year in April, as long as the necessary changes in the law have been passed by Parliament.
It is expected that by going digital considerable savings will be made. Indeed, HMRC claims that by moving another £29 million transactions online, between £160 million and £220 million could be slashed each year.
I am a chartered tax advisor with a specialism in the freelance contractor sector advising contractors on how to structure their affairs and recruitment businesses and end hirers on the effective…
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