If you’re an umbrella company contractor, freelancer or any other type of sole trader, HMRC wants to hear from you about how it can make itself better.
Umbrella contractors, here’s your chance to change things for the better: the tax authority is currently soliciting feedback and opinions from now until the 11th of May on how it can go about improving its penalty application process. HM Revenue & Customs is specifically asking for ways in which it can differentiate penalties levied on individuals and businesses that might have accidentally missed a payment deadline versus those Brits that have made it a habit of trying to get one over on the system to avoid paying their fair share altogether.
This is potentially good news for any contractor or other self-employed Brit that might have found themselves in hot water accidentally after missing a payment deadline or something similar. When you manage your own business things have a way of slipping through the cracks, and one of these is undoubtedly tax matters. For what it’s worth, I’m rather pleasantly surprised to see the tax authority acknowledging that mistakes and accidents do happen – and that these incidents don’t deserve Draconian responses in the same way that recidivists, repeat offenders, and outright tax dodgers require.
HMRC even says so in the discussion document it released in which it called for opinions on the matter. The taxman acknowledged that the ‘vast majority’ of Brits will meet their obligations properly, and that it only ends up penalising a very small sliver of businesses and individuals every year. HMRC wants to ensure its approach works as well as possible according to the discussion document, adding that it’s time to consider whether it should begin to differentiate between someone who makes an occasional error versus those who are persistently and deliberately not complying with their tax burdens.
Honestly I think a more fluid tax penalty system is very much needed in the UK, especially one that’s graduated to deal with first-time offenders who obviously made an accidental maths error with leniency. At the same token, any tax reforms really need to throw the book at repeat offenders – no more of this slap on the wrist business that allows these big multinationals to get off Scot-free!