Page 24 - DIY INVESTOR MAGAZINE - NOVEMBER 2018
P. 24

     ‘TAXES, DEATH AND TROUBLE’: HMRC COMES OUT SWINGING FOR THE SELF-EMPLOYED
  ‘There’s only three things that for sure: taxes, death, and trouble’ – as Marvin Gaye rightly said, and he knew a thing about all three! - Laurence Taylor, founder and chair, Easy As 123
As Mr Hammond yet again circles us 4.8 million self- employed with his child-catcher net muttering about pinning us down and making us pay our fair share of NICs, it troubles me that the Exchequer and its HMRC dogs of war continue to view us as the adversary.
The latest battleground is over off-payroll working rules (known as IR35), and having completed a short and by all accounts extremely negative consultation, with damning responses from tax firms and trade bodies to charities and status experts, Mr Hammond eyed this Autumn’s Budget as a way of slipping us a Mickey Finn whilst the smoke & mirrors illusion of Brexit holds the attention of the headline-writers and ‘opinion-formers’.
What other delights are passing mostly under the radar could be seen as proving that HMRC has been told by its trainer to come steaming out of the corner with its gloves up and head down. It is seeking new powers that will allow it to obtain information about people they suspect of tax evasion without prior approval from a tax tribunal, as happens at present, and that involves bank data. This seems to be allied to an EU directive that seeks to facilitate the exchange of banking information in a bid to combat tax fraud.
There has also been talk about HMRC developing the scope of digital tax accounts by gaining access to our bank data. In this scenario, they will see all receipts as taxable income with the onus on us to provide evidence otherwise, and then will base their tax calculation on what they see as the source of truth. Depending on your standpoint, this is either a brave new world of seamless integration of technologies or a horrifying Orwellian prospect...
IT TROUBLES ME THAT THE EXCHEQUER AND ITS HMRC DOGS OF WAR CONTINUE TO VIEW US AS THE ADVERSARY
In other news, anyone failing to pay late tax faces increased measures as HMRC cracks down, seizing assets from 2,833 businesses last year, a jump of 400% since 2014-15.
I didn’t realise that it takes a debt of as little as £750 to attract a winding-up petition, so expect to read a deal more about business deaths.
And in a nice little twist of the knife, HMRC has increased the interest rate it charges on late tax payments to 3.25% but, surprise, overpaid tax is repaid at 0.5%!
What doesn’t help is the perception that HMRC is
soft on the big poisons: a deputy director let slip that criminal proceedings are not the ‘default option’ for cases of tax evasion, that they won’t prosecute the rich and famous because ‘these types of people don’t want the reputational damage of custodial sentences’ – unlike the other 99.9% of us who positively welcome a spell in chokey!
This is nowhere better illustrated than with the so-
called ‘Google Tax’. A year ago HMRC started a consultation on the challenges posed by the digital economy for the corporate tax system, only 3 years after George Osborne pledged (before his neat sidestep to BlackRock) to ensure big multinational businesses pay their fair share.
To be fair, Google are now paying all of £49.3m on UK profits of £202.4m on sales of c. £5.7bn...
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