HMRC crackdown

Contractors and freelancers working in the UK were warned today to get their taxes in order now to ensure that they aren’t caught up in HMRC’s latest crackdown on workers attempting to evade their tax responsibilities.

The warning followed news that HMRC is turning its focus on the 15% of the workforce who identify as self-employed, whether as a sole trader, contractor or freelancer.

Tax preparation specialist David Redfern, founder of DSR Tax Claims, urged self-employed workers to ensure that their taxes were in good order to prevent HMRC investigation and action.

With HMRC pushing forward with plans to roll out IR35 legislation to private sector contractors, despite continuing controversy over its ‘Check Employment Status for Tax’ tool, as well as the looming repayment deadline for those contractors who used employment benefit trusts to minimise their tax burden, David recommended that self-employed workers clarify their tax position without delay.

“It would appear that HMRC has turned its focus on those within the contracting and freelance sectors, perhaps due to the perception that these sectors have been historically reluctant to pay their dues in full,” David said.

“It’s not uncommon for freelancers and contractors to forego professional tax advice, due to the financial impact on them, but as we are starting to see, it can be far more expensive to put things right once HMRC is involved.

“HMRC is rightly cracking down on those who are exploiting their self-employment status to avoid paying tax and unfortunately, those who are trying to do the right thing are being caught up in the crossfire.”