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HMRC walk off with record haul in extra tax from contractors

Contractors in the construction industry have been pumping record numbers of extra tax into Treasury coffers this year – to the tune of a massive £122 million.

Her Majesty’s Revenue & Customs is most likely chuffed to bits over the uptick in their revenue gathering activities, especially since the volume of cash has gone up by an astonishing 55 per cent year on year. It’s an obvious result of how zealous the Government has been on stamping out tax evasion and tax avoidance amongst the self-employed, but many critics say that the unheard-of increase in extra tax revenue is indicative of nothing more than an unfair focus on contractors.

And let’s be honest, this wouldn’t be the first time that the Government has tried to squeeze every last drop of blood that is the stone from the British taxpayer. Many industry bodies are up in arms after the data went public, and I can’t blame them or find fault with their ire in the least; for what it’s worth I agree with the assessment that British contract workers are being taken advantage of by the same Government that supposedly values them so highly.

Look, no one’s going to try to argue that tax cheats shouldn’t be dragged out into the light of day and exposed for all to see. I’m all for making everyone pay their fair share to HMRC, but new Treasury guidelines are most likely treating contractors and freelancers like second-class citizens. I’m not the only one who thinks so, either – the Chartered Institute of Taxation released a statement recently that said while it agrees in spirit with the Government’s new focus on stamping out false self-employment, the harshness of the Government’s plan of attack is doing more harm than good.

The only way to really remedy this issue is to make these guidelines much clearer, if you ask me. Cut through all that red tape, clear it away, and instead come up with simple, foolproof tests for false self-employment that are standardised and that work well at uncovering lost tax revenue without destroying legitimate businesses. Now whether the Government will overhaul their guidelines and implement a much simpler approach to rooting out tax cheats is anyone’s guess; as for myself I’ not going to hold my breath.

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