16th September 2019
HMRC to be investigated for aggressive tax collection efforts against freelancers
HMRC's "Loan Charge" questioned by government, giving hope to struggling freelance workers
ETZ Payments, Nick Woodward, provides commentary on why reliable and regular payments are essential for freelancers
Hi
I hope you're well and the following is of interest.
HMRC's aggressive approach to tax collection has been called into question by Chancellor Sajid Javid, who has called for an investigation into HMRC's efforts to apply further penalties to thousands of freelancers across the UK.
HMRC has levied a Loan Charge against freelancers who are suspected of having engaged in "disguised remuneration schemes", a penalty which has been harshly criticised by freelancers and politicians alike. It appears that there is little evidence to implicate the freelancers, most of whom are struggling with debt already as a result of their inconsistent incomes and poor payment methods on behalf of their employers. Research from ETZ Payments shows a third of workers - 1.4 million people - in London who are working in a freelance capacity have had to turn to pay day lenders or short term finance solutions due to inconsistent payments from their work, while 15% of freelancers across the UK have had to do the same.
Complaints have been directed at HMRC on a variety of grounds; many have provided evidence to suggest that HMRC has submitted multiple demands to the same people with differing settlement figures, while some freelancers have been forced to sell their homes or declare bankruptcy in an attempt to satisfy tax collections with questionable legal bases. However, HMRC has seemingly declined to address the employers who are likely responsible for any tax avoidance, instead choosing to pursue individual workers in an effort to close the tax gap.
Nick Woodward, CEO of ETZ Payments, offers the following commentary:
"It is extremely disconcerting to learn that freelance workers around the UK are struggling to meet their financial obligations due to inconsistent payment from recruiters and employers. Modern technology that allows fast, faultless and frictionless payments should mean that these issues are a thing of the past; it is essential that the whole payment system is revolutionised to help freelancers cope with any payments required of them, rather than having to turnto borrowers to make such payments."
If you would be interested in any more information or further commentary, please do not hesitate to get in touch.