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Are 37 per cent of contractors targeted by the taxman?

If you’re self-employed, there’s a 37 per cent chance that Her Majesty’s Revenue and Customs might want a moment of your time – and not in a good way!

In fact, a new survey from an umbrella service contracting provider just discovered that nearly four out of every ten freelancers and contractors have been under the microscope when it comes to the taxman’s scrutiny and have come up wanting after being measured. This translates to well over half a million contract workers being subject to one penalty at the minimum, most likely for tax avoidance or falling under IR35 classification – though there were a shedload of issues due to late submissions.

Of course if the damned tax code wasn’t so blasted obtuse and impossibly complex, maybe all these poor contractors would have been able to get their taxes submitted in time and before deadline. Over half of those surveyed said they were sick and tired of trying to suss out what in the world HMRC tax guidelines were actually saying, while an additional 42 per cent admitted that this was their chief concern above all else, if you can believe it!

I can only imagine what’s going through the heads of these contractors as they sit there, sweating, over their tax paperwork, more and more confused every year as increasing reams of ‘helpful’ tax guidance pile up. The taxman is so damned clueless when it comes to making things more streamlined and less difficult, and the number of sleepless nights these poor self-employed blokes go through must be positively astronomical!

IR35 guidance is one of the worst problems faced by contract workers, as the actual disguised employment legislation has remained the same for several years yet the guidance keeps changing. It seems that there’s a new guidance every few weeks on IR35, serving to do nothing but obfuscate an already thorny bit of tax law even further. The newest guidance has been universally reviled as absolutely awful, with industry experts saying that it does nothing but make matters worse – in fact many freelancers that are at a low risk for falling under IR35 are completely mis=classified under the new guidance as being at extremely high risk for being considered a disguised employee – can you imagine the fright these upstanding contractors must have gotten after going through all the steps in the guidance, only to arrive at such a horrifying state?

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