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Budget speech reiterates chancellor’s focus on tax avoidance

Contract workers beware: the chancellor’s recent Budget speech reiterates once more the focus George Osborne wants to place on tax avoidance issues.

Tax avoidance: it’s certainly the gift that keeps on giving, if by ‘gift’ you mean ‘absolute pain in the arse.’ It’s especially troublesome for freelancers, contractors, and other self-employed Brits – especially since the chancellor has been labouring under the delusion that stamping out tax avoidance amongst contract workers will solve the UK’s financial woes.

The costs to the Treasury are apparently great when it comes to some tax avoidance. The construction sector alone is estimated to cost HMRC in excess of £380 million per annum, though I’m not sure how the taxman got its hands on this particular figure. The problem arises when construction company employees – or the permanent workers of any firm for that matter – masquerade as the self-employed through the use of an intermediary. In theory it’s a brilliant way to get away with paying less taxes, but is it really that big of a problem that chancellor Osborne has to bring down the full fury of the Government on the heads of otherwise law-abiding contract workers?

I’m not saying that there aren’t individuals out there that are trying to get one over on HMRC when it comes to not paying their fair share, as that’s obviously not the case. There are tax cheats everywhere, but there’s not any strange concentration of people dedicated to defrauding the Government in the self-employment field. What’s really going on here is that contractors and freelancers are easy targets for the Chancellor because he doesn’t have the bollocks to go after the true tax cheats – large multinational companies like Amazon or Starbucks that funnel huge swathes of their pre-tax profits to overseas tax shelters instead of paying the taxman what they owe.

So why doesn’t George Osborne go after these multinationals? Well let’s be honest here – these companies have altogether too much economic and political clout to be challenged, so the chancellor is instead picking the low-hanging fruit on the employment tree by harassing self-employed Brits. It’s saddening, but there’s little we can do about it; the tax rules are written in such a way that these multinationals know every single legal loophole, and the Government is too frightened to challenge them on it.

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