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The Professional Contractors Group (PCG), which represents UK freelancers, is calling for a legal duty of care to be placed on HM Revenue and Customs. The trade group says the department’s risk assessment system should mean that it does not launch rogue investigations, or when it does they should be swiftly closed at minimal cost. Where this does not happen, there should be strong safeguards in place, not least to allay freelancers’ fears that the taxman’s sole intent is to extract more money from them. John Kell, policy officer at the PCG said: “Freelancers and other small businesses have very little trust in HMRC so it’s high time that HMRC was put under a legal obligation not to harm peoples’ commercial interests. “Many of our members have costly and distressing experiences of dealing with HMRC, even when they owe no tax and it’s quite wrong that HMRC can just walk away. “There’s currently no mechanism for compensation for the stress and loss of earnings that a lengthy Revenue investigation can bring. PCG believes that must change.” In a formal response to HMRC, the PCG said if the authority is functioning as well as it claims, then there is nothing to fear from such a legal duty of care. In fact, imposing a duty of care would help improve the relationship between small businesses, freelancers and HMRC, the group added. The call comes weeks after the judgment in the Arctic Systems case, in which the tax authority was found to have issued a wholly incorrect demand for £42,000. That demand saw the owners of Arctic Systems, Geoff and Diana Jones, pursued to the House of Lords after several years and hundreds of thousands of pounds spent in legal fees. Despite HMRC’s repeated denials that Arctic was a test case, the government announced its intention to change the law as soon as it lost the case. IR35 has also shown HMRC’s consistent inability to deal adequately with small businesses: of the 1,431 cases known to PCG, only 4 have resulted in any tax being owed. Moreover, a recent PCG survey found that 73% of freelancers said that they felt HMRC was out to extract as much money as possible, and 69% saw tax inspectors as viewing them as “guilty until proven innocent.” Aug 10, 2007 Email this article Printer friendly page Previous Page
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