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Government letting the side down in debt collection

If you’re a contractor or freelancer and you’re tired of being harried by the Government for tax avoidance, don’t worry – there’s a chance they’ll forget you.

Or at least that’s what the writing on the wall says according to the Committee of Public Accounts. The committee chair, Margaret Hodge, had some very stern words for the Government in regards to their ability to collect on the debts the Government is owed. Apparently tax collection is just too difficult for Her Majesty’s Revenue & Customs – despite the fervor that the taxman has for rooting out every single contract worker that might be at risk for falling under IR35 – and the committee cites the unbelievably high sum of £22 billion that has gone uncollected – and that’s after the Department for Work & Pensions and HMRC has already written off £3 billion of that sum!

The total owed to HMRC at the moment is some £15 billion according to official figures. This is of course after the tax authority has been turning over every stone for unpaid contractor tax. Imagine how much higher the amount owed would be if HMRC hadn’t been going at it hammer and tongs over the past year or so. If you’re one of the other entities that owes cash to the Government, you can probably sleep better at night knowing that you’re likely never going to have to hand over the cash you owe, you cheeky little bastard.

So what does this bit of information do for you? Well if you’re a contract worker that’s been subject to the Government’s tender ministrations, you’re probably more than a bit angry. I know I would be, especially if the revenue collected from the tax avoidance crackdown has been literally just a few pennies in comparison to the tens of billions of uncollected cash that’s still out there. Is there anything harried and put-upon freelancers can do about it? Well sadly no – except perhaps going down to the local pub and having a few pints to drown your sorrows. Just make sure you don’t try to pass off your night of drinking as a business expense – something tells me HMRC won’t take very kindly to the idea.

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