The Professional Contractors Group (PCG) have condemned the MP expenses scandal after it was revealed that nine cabinet members, including the Chancellor of the Exchequer, claimed on their parliamentary office allowances for the professional help they hired for assistance with their personal taxes.
John Brazier, managing director of PCG commented, “This is frankly galling. Tax rules prevent most people claiming the cost of employing an accountant to handle their self assessment return. There seems to be one rule for cabinet ministers but another for the rest of us. This is morally indefensible.”
The freelancer trade group stated that the current system for small businesses is too complicated and the tax and regulatory framework which applies to them is unjust. Freelancers are burdened with a convoluted tax return to complete due to the vague guidelines associated with the contentious IR35 legislation. The complex nature of these tax returns leads many freelancers to seek professional help with their self-assessment returns, yet these are classed as private expenses and are therefore non tax-deductible.
Brazier continued, “A normal taxpayer completing the self-assessment form has to be not just accurate, but able to prove with hard evidence that they are paying the right amount of tax. Failure to do so can have very serious consequences.”
“For the freelance contractor there is a significant cost in making sure the self assessment return complies with the raft of tax legislation which constrains small businesses and subjects the employment status of the individual freelancer to obscure and ambiguous rulings.”