The latest figures from HMRC reveal that the tax authority did not pick up 4.7 million calls made by contractors, freelancers, and self-employed professionals. These figures are alarming and reveal to those who are flexible workers that their doubts and queries are not important to HMRC, or at least that is how it seems.
Meg Hillier, MP, expressed her disappointment at the large number of unanswered calls by the taxman. She added that it was worrying and disappointing for self-employed professionals, who have to deal with their own taxes.
The Association of Independent Professionals and the Self Employed (IPSE) also had similar misgivings about HMRC not answering calls from millions of independent professionals and self-employed. The IPSE warned that HMRC may answer even fewer calls should the IR35 rules be changed again.
IPSE added that it anticipates the problem will compound if the government keeps introducing more complex and onerous changes to the tax rule. At the moment, HMRC is under pressure to answer calls, and matters will get worse if the government decides to bring the private sector into the fold of IR35.
The latest HMRC figures show that a total of 43 million calls were made to the taxman in 2017. Of these, 10% of the calls were not answered while 14% calls took over 10 minutes to be answered. But, the response rate is worse than the figures show. The 14% of calls that took over 10 minutes to be answered do not include the time that different callers had to spend dealing with HMRC’s automated system, which has a waiting time of around four minutes.
Andy Chamberlain, the Deputy Director at IPSE, pointed out that time is money for the self-employed, and the time they spend on the phone waiting for HMRC to respond could be used to earn. HMRC should realise that independent professionals and the self-employed do not have the luxury of experts and consultants to help them with complex tax issues. They depend on HMRC for help.
IPSE has warned that if IR35 covers the private sector, businesses will have to determine the tax status of their contractors, and with HMRC not answering phones, businesses will be unable to get timely help from HMRC. This could result in inaccurate employment status determinations. HMRC contends that its response time has improved, reducing to less than five minutes over a two-year period.