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Low paid freelancers could be targeted by HMRC

Some freelancers that earn less than most may soon be targeted by Her Majesty’s Revenue and Customs, according to a recent BBC investigation.

The reasoning behind this is the working arrangements of these freelancers, as their employers set them up, may be being used for no other purpose besides tax evasion. The fear on the part of HMRC is that some personal service companies are paying staff expenses in order to avoid paying national insurance contributions.

A BBC investigation found that employers may be inflating figures towards some nefarious end. One example of this is how one warehouse picker reported barely spending £40 on expenses on a week, yet her payslips indicate her pay rate is supposedly more than twice that.

The BBC approached HMRC with their findings, and the taxman said that it will pursue any employers that have been withholding national insurance or tax payments. An HMRC spokesman remarked that employees should not worry in instances where their employers are the ones that are pulling the wool over anyone’s eyes.

HMRC will not, as a general rule, hold employees liable for the actions of their employer, said the spokesman, adding that the taxman will consider cases on their own merits whenever an employer cannot be found or otherwise tracked down. However, instances of employees masquerading as contractors themselves will still be subject to IR35 enforcement.

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