Claims that HMRC is penalising smallest firms by approaching clients

by Susie Hughes at 11:52 14/03/14 (News on Business)

Freelancer trade group has attacked HM Revenue and Customs for which it describes as penalising the smallest firms by targeting their clients for information about their business arrangements.

PCG claims it has learned that HMRC has undertaken a campaign which targets the UK’s very smallest businesses by requesting detailed information from their clients on all payments made to them under a contract for services. Advertisement The letters request a wide range of sensitive information from the clients including the supplier’s name, the ‘worker’ name if different, along with VAT number, passport number or National Insurance number and details of any amounts paid. In a move PCG believes is designed to avoid bringing larger suppliers into scope, HMRC has only requested the information on payments of up to £350,000. According to the trade association, this instance of HMRC choosing to target independent professionals while purposely excluding large consultancies is yet another example of one rule for small companies and another for big business. Chris Bryce, PCG’s CEO, said: “There is simply no justification for HMRC to write to clients requesting detailed information on the working practices of their suppliers. Especially when you consider that they are doing so with absolutely no evidence of any wrong doing. “For any business, it would be incredibly damaging to have HMRC writing to their clients to insinuate that the way they are doing business may not be legitimate. For the smallest businesses, where client relationships are key, this is especially harmful.” Penalising HMRC appears to be using recent data from the Office of National Statistics(ONS) which points to a rise in self-employment over the last few years in order to justify this new tactic - something PCG believes is penalising the sector for success. Mr Bryce said: “Independent professionals contributed £95 billion to the UK economy in 2013. This figure is continually rising as more and more people choose to start their own business and this can only be good for our economy. “Considering that the Prime Minister, David Cameron, recently told PCG that he believes SMEs are the very lifeblood of our country and of local communities across the land, we are deeply concerned about this unwelcome development. “Waging a campaign against these enterprising individuals by targeting them via their clients is anti-business. What’s more, to use the success of the sector as an excuse just isn’t acceptable. Independent professionals should be celebrated, not penalised for the way they choose to work.” HMRC In response, a HMRC spokesman told Shout99: “We don’t comment on individual cases. “It is part of our routine activities to ensure we have the most up to date information about their activities which in turn helps us to ensure everyone pays the right tax. "We want to make sure no one builds up a tax debt that has to be paid off in the future. Any one who needs further help is welcome to get in contact with us”. Tweet -- If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'. - Susie Hughes © Shout99 2014

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