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Despite Efforts by HMRC, Contractor Tax Tribunal Cases Pile Up

Are you an independent contractor, freelancer or intending to pursue this line of work in future? If so, you should seriously consider any associated tax implications and most notably, how to address such issues, should they arise.


While the average contractor is always in compliance when it comes to their tax affairs, every now and again situations do arise that require additional contact with HM Revenue and Customs. When there is any dispute it is in everyone’s best interests that it is resolved as soon as possible. While a much publicised scheme introduced by HMRC claimed to focus more on such resolution, some of the figures appear to suggest otherwise.

A contractor should always be aware of what solutions are available to them should they find that they are in dispute in some way with the government tax collectors. They should therefore be aware of the Alternative Dispute Resolution service that was introduced two years ago. This so-called “softer” approach was aimed to counter accusations that the government was being heavy-handed. Under the scheme a facilitator, who was impartial, would be the middleman attempting to bring everything to conclusion.

While an apparent two thirds of all applications through this service resulted in a partial resolution, when we look at the figures it is somewhat shocking to see that there is now a record high backlog of outstanding tax tribunal cases. 27,000 or so unresolved cases are part of a backlog that appears to have doubled in the last four years.

Of course it is also necessary to understand what any delay in settlement of taxes due can mean to the average contractor. Tax law does say that for every day that tax is “outstanding” additional penalties and interest may add up.

As a consequence the Professional Representation Network believes that it is within everybody’s interest in the contractor industry to bring as much pressure as possible to bear, so that the unresolved case backlog is reduced and that the positive effects of the Alternative Dispute Resolution service accelerate. What we need is a relationship between the contractor and the tax authority that is much more transparent, less stressful and less likely to lead to litigation.

About Professional Representation Network

The Professional Representation Network is a complete contracting provider, providing a variety of services to contractors from varying industries around the world. PRN identifies opportunities, negotiates contracts and provides support to contractors at every stage of the relationship. Relying on 40 years of experience in consulting and representation and access to an established network, PRN brings passion to help develop a contractor’s professional life.


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