PCG, the organisation which represents the UK’s freelancers, contractors and independent professionals, reports that HMRC has undertaken a campaign which targets the UK’s very smallest businesses by requesting detailed information from their clients on all payments made to them under a contract for services.
The letters request a wide range of sensitive information from the clients including the supplier’s name, the ‘worker’ name if different, along with VAT number, passport number or National Insurance number and details of any amounts paid.
In a move PCG believes is designed to avoid bringing larger suppliers into scope, HMRC has only requested the information on payments of up to £350,000. According to PCG’s CEO, Chris Bryce, this instance of HMRC choosing to target independent professionals while purposely excluding large consultancies is yet another example of one rule for small companies and another for big business.
Chris Bryce said:
“There is simply no justification for HMRC to write to clients requesting detailed information on the working practices of their suppliers. Especially when you consider that they are doing so with absolutely no evidence of any wrongdoing.HMRC appear to be using recent data from the Office of National Statistics which points to a rise in self-employment over the last few years in order to justify this new tactic - something PCG believes is penalising the sector for success.
For any business, it would be incredibly damaging to have HMRC writing to their clients to insinuate that the way they are doing business may not be legitimate. For the smallest businesses, where client relationships are key, this is especially harmful.”
“Independent professionals contributed £95billion to the UK economy in 2013. This figure is continually rising as more and more people choose to start their own business and this can only be good for our economy.
Considering that the Prime Minister, David Cameron, recently told PCG that he believes SMEs are the very lifeblood of our country and of local communities across the land, we are deeply concerned about this unwelcome development.
Waging a campaign against these enterprising individuals by targeting them via their clients is anti-business. What’s more, to use the success of the sector as an excuse just isn’t acceptable. Independent professionals should be celebrated, not penalised for the way they choose to work.”It seems that HMRC is targeting the smaller fish, because it knows that they are easy pickings.
Tax does have to be taxing.
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