HMRC is attempting to secure £5.5bn in backdated tax payments from thousands of freelancers and contractors as part of a new raid on aggressive tax avoidance schemes.
HM Revenue & Customs was handed the power to target wealthy tax dodgers last year and the tax authority is now issuing ‘pay now, argue later’ notices to thousands of self-employed workers, demanding that the backdated taxes are paid in full within three months.
The Telegraph reports that more than 60,000 such notices have been issued to freelancers and contractors, the majority of whom were working in sectors such as computing and banking during the late 2000s. HMRC is claiming that their tax affairs during this period are now deemed ‘aggressive avoidance’.
Most of those affected earned an estimated £70,000 and HMRC is reportedly demanding that the flexible workers involved need to pay sums of money equivalent to a year’s pay within a 90 day deadline. The move is part of HMRC’s new directive to calculate the tax it is owed and demand it is paid immediately, with refunds only given at a later date if its sums were incorrect.
Dominic Arnold of accountants Moore Stephens said: “HMRC insisted these powers wouldn’t be used disproportionately. The message was very clear that they would be issued to people who can afford it, which masks the reality that thousands of people are being caught who haven’t got the funds to pay an accountant – let alone challenge the sums in court.”