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Contractors slam proposed HMRC "snooping" powers  

A leading IT Contractor group, the PCG, has condemned proposals to give new powers to HM Revenue and Customs (HMRC), which would give tax inspectors more powers to "snoop" on contractors.

The plans, outlined in HMRC's consultation on new powers, mean the taxman will be able to ask contractors' end clients for information, and use it in court even if it is wrong; the taxpayer would have no right of appeal.

"HMRC often approach end-clients without identifying the right person to speak to, and get unclear and often incorrect information which can be disastrous for the taxpayer. It means the true nature of their working arrangements with a client may not be accurately portrayed in any hearing and the taxpayer has no right of appeal," said John Brazier, PCG's managing director.

In recent IR35 cases to go to the Special Commissioners, the results have been strongly influenced by the evidence given by a representative of the contractor's end-client on behalf of HMRC.

The Group argues that freelancers should have the option of approaching the end-client themselves, so that accurate information is obtained from the appropriate person. "This is simple common sense and actually benefits HMRC as they wouldn’t waste their time and our money dealing with inaccurate information," added Mr Brazier.

Contractors fear that the "catch-all" nature of the proposals will allow the taxman to contact anyone they like and use inaccurate or sketchy information.

"This is an open invitation to snoop and pry and again shows that when it comes to tax, we are all deemed to be on the fiddle. Anywhere else in life, we have redress to correct inaccuracies and clear our names - except when it comes to the taxman. This sort of attitude undermines business confidence in HMRC and, sadly, just underlines what our members feel - that despite all its promises this Government has no concept of, nor interest in, encouraging small businesses to flourish in the UK."


Published on Mar 6, 2008


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