HMRC wants to speed up self assessment registration

You still have to register as self employed even though you are in SA to connect with the NI system. Otherwise the NI gets removed from the Self Assessment.

I though the whole point of the delayed registration (and in practice of course you just need to file on time, the theoretical registration date is unenforced) was that many small sole trader businesses start up, lose money or barely make any, and never need to trouble the tax system. I think the stats are that well in excess of 50% new business don't make it out of the first 12 months. (stats vary widely)

if HMRC push to start registering business too early they will just end up with 100,000's of 'ghost' returns each year, far too small for agents and so clogging up HMRC's resources battling with automatic fines and all sorts that often happens when the tax payer thinks wrongly "I clearly don't owe anything, I will just ignore all this stuff". Or alternatively think "how hard can it be to file this thing?" and tries to file themselves going through all the newbie mistakes that unrepresented tax payers will naturally make, chewing up huge resources HMRC's side supporting and correcting it all.

HMRC ought to remember their job is collect taxes and not create mountains of work for themselves and the public.

The only people coming forward sooner are likely to be the ones who would have paid anyway.

Am I out of date?
I thought there was an expectation that a new trader is supposed to use CWF1 within three months of commencement
Either way this is just HMRC looking to maximise penalties
Expecting new traders to jump into an untried untested new regime is wholly unrealistic
If HMRC could answer letters in less that three months perhaps we could believe it to be realistic to expect comparable admin performance for new traders
Seriously
Calm down HMRC
It is only tax
And tax is not meant to be taxing (per your telly ads)

I know it's late on a Friday, but why would Sarah (Example 3) need to .. register for ITSA within a few months of that total exceeding £1,000?
Is this assuming a new lower annual turnover threshold for mandating MTDforITSA?

But, whether it's an intrinsically good or bad idea, I do wish HMRC would learn to respect that we (and taxpayers in general) have functioning brains ...
"HMRC believes that the taxpayer will benefit, as interacting with the tax system at an earlier stage will allow the individual to form good record-keeping habits, and give them more time to plan their first tax payment."

Can they please provide some sort of evidence that there is ANYONE out there who, as a trader of any type, believes those to be a benefit worth any additional effort or cost.

I realise this may be frowned upon but my honest reaction to this call for evidence is that we should not participate in it whatsoever.

With the clear disregard to practitioners' comments which HMRC have shown in the MTD 'so-called' consultation process and many other consultations with which practitioners will be aware, I think we are just playing into the hands of HMRC if we participate in this ongoing nonsense.

As Tornado has said many times, in relation to MTD, this is a problem of HMRC's making and we should not scramble around to be part of the solution.

Leave them to it - it's their mess.

Rebecca, I think we are all fed up with HMRC and their consultations. Agents like us are treated with disdain. This just seems like yet another rubber stamping exercise where HMRC can tick the box which says "consulted with customers?". Customers eh? what a joke; as if we could go anywhere else to receive a first class service from a first class Gov't Dept NOT

The requirement to register a new trade by 5th October is simply (so I understand) to give HMRC time to issue the statutory 3-month notice to file a tax return by 31st January, which is why the 5th Oct date is not in point where the new trader already has a UTR. It is hardly surprising, therefore, that HMRC don't issue penalties for not notifying by that date, where the return is filed by 31st Jan. What is more surprising is that I have seen new clients (without a UTR) register a new trade after the following 31st January, at which point they are, of course, given the statutory 3 months to file their tax return. Whilst no late filing penalty can be due in these cases, I have not seen HMRC issue even a late notification penalty.

Accelerating Self Assessment registration, coupled with the general quarter of a year delay by HMRC in dealing with just about anything that comes their way, makes sense - when you think about it !

HA! I've got 3 clients currently still waiting for their UTR having registered online over a month ago. Speed up the deadline to register all you like - if you don't give people the reference having done so, the system is not fit for purpose.

On the other side of the coin and more worryingly, HMRC are blocking people from filing under self assessment despite being self employed - purely to avoid repaying overpaid tax.

I've got a couple of clients not of english origin who either didn't return the "repayment security check" form, or didn't complete it to HMRC's satisfaction so despite still working and earning profits, now can't file as the UTR is closed... HMRC sitting on £3k for one of them. Not sure how this sits with the legal requirement to register and in my opinion, is questionable behaviour.

I expect that the change will be highly inefficient:
- The earlier requirements will put a new hurdle up front that will put some people off starting a business, who we would wish to start
- It will create an enormous load of work that’s avoidable, because so many businesses fail within the first year.

My answer, as always - Penalty Farming, anyone?

What sort of utter horlicks is this? The only consultation that HMRC really needs is on how to get their own act together.
We have clients (not self employed, need to file because of dividend income) where a paper SA1 and 64-8 has been submitted many, many months ago and still waiting for UTR numbers.

"HMRC Call for evidence."

In other words, as usual, they have already decided and are simply mounting yet another time wasting exercise to pretend they might consider perspective and evidence from indolent professional bodies who clearly don't give a flying fig for the members who pay their bills!

If HMRC could get their Fetch system to work properly it would be a great help. Yesterday I "fetched" a client's data. She has two NHS employments. The gross salary and tax for one employment was shown correctly. For the other just the tax deducted was shown. No gross salary. The only other figure was total earnings qualifying for Class 1 NIC of approximately £35k. Her combined salaries amount to just under £50k. Luckily I did have her P60s.

How can we trust them when their systems make mistakes like this?

'...speed up self assessment registration...'?
Within weeks of commencing self-employment, a new client submitted a paper CWF1 & 64-8 to HMRC on 05.08.21
Client received their UTR & appeared on my SA clients' list last Friday, 28.01.22
I suggest HMRC fire a (very large) rocket up their own backside first?

"Where the individual is already within the self assessment regime, they can inform HMRC of their new trade or business on the SA tax return that covers the period in which the business commenced."

That's not correct because HMRC won't setup the NI record. It is still necessary to either register using one of the formal channels (online or CWF1).

Before Class 2 became part of SA and was paid by monthly DD, it was necessary to register within 3 months of commencement. But that was only so the DD could start. Now that Class 2 is part of SA there's no need for that 3-month deadline. However there are numerous problems within HMRC.

1. When agents register using the online SA1, HMRC will reject registrations where there's already a UTR in place. But if we submit a Return without registering HMRC consider it an unsolicited Return which will delay refunds. HMRC needs to fix their SA1 process to permit registration even if a UTR already exists.

2. HMRC will permit agents to register a sole trader via the agent portal. But once HMRC start processing it, the registration disappears off the agent portal and we have no way to check progress or receive the UTR. Surely in this digital age HMRC can leave the registration on our portal and show what stage is at and ultimately the UTR.

3. We can register a partnership and the nominated partner online via the agent portal, but only if the nominated partner is not already in SA. If the nominated partner is not in SA we have to use another partner as the nominated partner, but if all the partners are already in SA HMRC's system won't work and we have to register on paper. HMRC need to fix this problem.

4. Until 6 years ago agents could register non-nominated partners online. But HMRC removed the online registration and now we have to use paper SA401. HMRC needs to restore the digital registration process.

Most registration I've submitted via the agent portal result in the client receiving the UTR about 3-4 weeks later. Where HMRC's systems won't accept an online registration and we have to use paper, I can still be waiting for the UTR 6 months later. That's a major problem if the client is in CIS.

Solution: HMRC needs to fix their systems so that agents can undertake ALL registrations via the agent portal.

No need for a call for evidence. HMRC just needs to fix its broken systems.

This is a bit of a strange request since in my experience HMRC have no interest whatsoever in enforcing the deadlines for registration even as they exist now!

I regularly have clients come into my office who have no idea that they were supposed to register with HMRC months earlier and I have never known HMRC to issue a penalty or any sort of notice for these late registrations.

I perhaps naively thought that this represented a dose of common sense from HMRC and an attitude of "No sense in punishing someone who has complied with the rules even if they complied late" but I gather from the article above that it was just commonplace HMRC C**k-up

"HMRC argues that an earlier registration deadline for ITSA will bring benefits for taxpayers as well as for the tax authority. "

I call (insert rude word) on that one. I see no benefit to the taxpayer whatsoever. They can register early if they like now.

I want HMRC to speed up answering my correspondence.

This stupid MTD for ISTA is going to lose HMRC money in the first instance with early retirement. That’s from my own conversations with clients. Then the disaster will ensue as it will take up will be slow as the non represented may struggle. It’s a massively complex unnecessary move. They really need to leave it as is. It’s forcing me to get out of the profession as it’s a step too far. Do they care? Not one bit. Maybe they could support business who are after all the having it hard as it is. Why make it harder?