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| CURRENT SECTION :: Money News | |
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The self-employed can only look on as basic rate taxpayers – about 22million people- receive an additional £60 in their pay packets this month. Courtesy of the government, the tax rebate is designed to make up for Alistair Darling’s decision to abandon the 10p tax band. Following concern that the chancellor’s move would hit the hardest up, he raised the personal tax allowance by £600 to £6,035 for all except higher-rate taxpayers. Basic rate taxpayers will see the benefits this month, with £60 added to their take-home pay, with £10 a month following for the rest of this tax year. However, self-employed taxpayers, as well as those over 65, will not feel the benefit until they start paying tax from January. “A twin-track treatment seems to apply, depending on what sort of taxpayer you are,” said Matt Coward of London chartered accountants Blick Rothenberg “Because the self employed calculate their tax after the end of the tax year they don’t get the relief until 31st of January 2010.” Yet also speaking to the FT, John Whiting, of PricewaterhouseCoopers, said the self-employed won’t lose out, as they will get a smaller tax bill when they come to declare tax for this year. Given the current economic climate, and because cash flow is often restricted in one-person firms, the self-employed may argue that they deserved the rebate at the same time. However, a further reaching tax issue is troubling the Professional Contractors Group, which represents freelancers, concerning a charter for taxpayers. Managing director John Brazier said the financial secretary to the Treasury Jane Kennedy should reconsider her decision not to put the new Taxpayer’s Charter in legislation. “We were extremely disappointed that the government has already decided not to put the charter on a firm legal basis,” Mr Brazier said on Wednesday. “The obligations on taxpayers to pay tax, and the powers open to HMRC to investigate them, are enshrined in statute; it cannot possibly be right that HMRC’s obligations to taxpayers will not be. Responding to HM Revenue and Customs (HMRC) about the scope of the charter, the PCG argued that, “a right that is not enshrined in law is a right that cannot be accessed by the citizen; it is therefore no right at all.” The group called on the Revenue to focus more clearly on the poor state of the relationship between the taxpayer and the tax authority, which it said had deteriorated. Relations between the two have sunk so low that “there is a risk of taxpayers becoming less willing to comply with their lawful obligations.” “This is a serious issue for the future of the tax system,” Mr Brazier added. “HMRC needs to put its money where its mouth is and show that it is serious about making itself accountable; if it does not, it will be sending a clear message that it feels it should be a law unto itself, and many taxpayers will regard this as totally unacceptable in a leading democracy.” Sep 15, 2008 Email this article Printer friendly page Previous Page
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