Are you in the “GIG ECONOMY”?

If so, watch out for the taxman…..

The growth of the UK’s ‘gig economy’ means that tax investigations are on the increase.

The ‘gig economy’ refers to companies such as Uber and Deliveroo who use short-term or freelance contractors rather than permanent employees. These types of contracts result in more ‘self-employed’ workers who have to take responsibility for paying their own tax.

If you are one of these workers then this blog is for you!

HMRC collected a total of £438m from investigations into taxpayers over the last year, highlighting the need to file accurate returns, especially for ‘gig economy’ workers. The healthy take up from these investigations means HMRC will likely escalate the number of enquires of this kind.

HMRC has already created a new “crack” unit – nattily named the The Employment Status and Intermediaries Team – charged to tackle companies that use agency workers to avoid tax and other employment obligations.

HMRC’s aim is to identify inaccuracies in tax returns and crack down on taxpayers from all walks of life – not just higher net worth or higher paid individuals.

Taxpayers who receive income from multiple sources – such as landlords and freelance workers – are particularly at risk, as their self-assessment returns will be more complex.

Of course it doesn’t help when HMRC make it so hard for people to contact them to discuss their tax affairs! You will likely need to exercise a great deal of patience sitting in a phone queue.

In recent times HMRC has invested heavily in technology such as forensic computer software in its desire to drive up the tax take. This enables it to identify potential targets for tax investigations more easily.

You may also have heard about HMRC’s latest ‘Making Tax Digital’ initiative which has raised concerns that the move online could drive even more mistakes. Those who look to take control of filing their own accounts and returns online rather than engaging an accountant to do it for them, need to think carefully.

Tax Investigations are often triggered by small careless errors, or even just a simple misunderstanding. But when discrepancies are found in a return it often triggers a lengthy, expensive and extremely stressful tax investigation process.

HMRC has the power to an investigate anyone who submits a tax return and while many investigations are the result of targeted campaigns or mistakes – others start out as random checks.

Tax investigations are an unwelcome and unnecessary burden.

Fortunately however, it is very easy to take out a low cost fee protection policy which will guarantee that if this happens to you, all professional fees necessary to defend your position are paid.

For more information

To find out more please get in contact – further details can be found here.

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