New Contractor Tax Worries - Why It Pays to Be Prepared
Apparently, if the contractor does receive a benchmarking letter that uncovers certain types of discrepancy, additional action could well follow.
Should contractors always be wary and be afraid that the proverbial “big brother” might be watching them? Perhaps so, as it seems that the new “benchmarking” projects currently underway at HM Revenues and Customs could lead to a full out inquiry being put in place, should said discrepancies be found in the contractor’s profit statement.
Benchmarking is the practice of determining averages in a given sector. Armed with multiple tax returns posted by individuals, corporations or contractors in a certain sector, the tax authorities can determine what is “normal” and what’s not.
Professional Representation Network wants to draw the attention of contractors everywhere to the fact that the authorities are implementing a new tool in order to keep a watchful eye on taxpayers. Those who are fully aware of the processes involved and who have experience of filing may have nothing to worry about, but those who are unsure should certainly seek out the guidance of a professional representative before they send anything into London.
Whilst the government has said that they’re testing benchmarks "because we think it could help business owners to make sure that their self-assessment returns are correct”, the caveat is that an inquiry could be launched if certain types of discrepancy are indeed found. Apparently, if the contractor does receive a benchmarking letter that uncovers certain types of discrepancy, additional action could well follow.
As this programme becomes more prevalent more and more different sectors will be engaged. Professional Representation Network wants to urge all contractors who have not sought advice regarding their self-assessment forms to get in touch well in advance of their due date.
If a full investigation does indeed follow and uncover a discrepancy, however innocent the discrepancy may have been, this can lead to additional potential costs, worry and time spent. While the contractor should definitely engage professional help at that point, it is surely better to engage such help in advance of filing, to try and avoid potential complications in the first place.
We all agree that taxation is a necessary evil and we should all be in favour of any amendments to the tax code that are designed to make things more equitable, more efficient and fair. Let’s hope that benchmarking is just such a programme.
The Professional Representation Network is a complete contracting provider, providing a variety of services to contractors from varying industries around the world. They identify opportunities, negotiate contracts and provide 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, Professional Representation Network brings passion to help develop a contractor’s professional life.
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