Categorized | finance, news

Treasury Select Committee voices concern with new tax plan

A new tax plan to force anyone involved in a tax avoidance scheme to pay disputed tax up front has been met with concern by the Treasury Select Committee.

The new proposals, which would grant Her Majesty’s Revenue and Customs the ability to go looking for unpaid tax from as many as 65,000 individuals – many of whom may be contractors or freelance workers – are in the view of the committee not justified. In addition, there the plan runs against many previous recommendations the Treasury Select Committee has already made, indicating that if the left hand does know what the right hand is doing, it just doesn’t seem to care in the slightest.

In essence, the new move will require anyone who’s suspected of being involved in tax avoidance of any kind to pay up front before the final decision is made as to whether or not they’re actually guilty. This innocent before proven guilty approach sticks in the craw of many people – not just the members of the Treasury Select Committee – and I have to join the ranks of those that are absolutely horrified at the prospect of people who have been otherwise going about their business ethically getting slapped with a compulsory tax bill that they need to pay before they can even clear their name!

Of course the taxman can’t just appropriate the cash immediately and without question. Anyone that would be targeted by this new tax plan would have the right of an appeal – a right they have to exercise within 30 days of the seizure of funds – and hopefully reclaim their money.

Still, the whole thing seems dodgy to me. I mean how can HMRC not end up misusing this over-reaching power by hoovering up as much money as they can from anyone they even tangentially suspect of being involved in a tax avoidance scheme? What about contractors incorrectly found to be falling within the disguised employment of IR35? Are they going to be subject to this as well? Because if they are there’s going to be a serious rash of contract workers and freelancers that will be filing appeals against the tax authority, especially when IR35 guidance is so murky as to falsely categorise many workers as high risk even though they’re quite safe in actuality. It’s going to be a huge bloody mess, whatever happens.

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