Her Majesty’s Revenue & Customs has positively plundered the construction contractor industry this year with a record £122 million in collected extra tax.
This amazing uptick is 55 per cent higher than what the taxman collected in the previous year and shows how adamant the Government has become in squeezing contractors and freelancers for every last penny they can. Many industry experts even point to this incredible windfall as the Government focusing less on stamping out tax avoidance and more on specifically targeting umbrella company contractors and other self-employed Brits with unfair tax burdens.
The big push has come to kerb so-called false self-employment, which is to be honest a serious problem but not nearly as bad as the Government would have you think. I mean yes there are some mightily well-paid blokes that masquerade as contractors instead of regular employees to avoid paying through the nose on tax but they make much, much more per annum than your average freelance worker; we’re talking enough money stuffed away in overseas tax shelters to put King Midas to shame. The majority of contractors don’t make nearly that much sadly, though it’s not from lack of trying!
It’s not just me that thinks the Government is pushing too hard on these contractors. In fact, the Chartered Institute of Taxation also has gone on record to say that the otherwise justified goal of taking on false self-employment is being pursued with too much zeal by those in power. Nobody should be falsely penalised, the CIT says, and I can’t help but agree with this assessment. It’s easy to throw the baby out with the bathwater when it comes to taxation, and I truly think this is exactly where the Government is heading on this one.
Listen, no one is denying that HMRC doesn’t work hard to keep revenue flowing into Treasury coffers in an effort to provide much-needed cash to keep the country functioning – they do. I just think that having the tax authority focus on stamping out such specialised forms of tax evasion is barking up the wrong tree; not only does it spend time and money pointlessly but it sends the wrong message as well. I think the taxman would be much more better suited if if would just stick to trying to wrest unpaid taxes from large multinationals and leave self-employed individuals to their own devices.
