Gig Economy – are you a short term freelance worker?
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 has a “crack” unit – nattily named 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 crackdown 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 makes 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.
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 ‘Making Tax Digital’ which has raised concerns that this 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 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 on our fee protection policy
To find out more further details can be found here.