With economic and tax issues, as well as struggles within the jobs market currently causing problems for many contractors and freelance workers, a recent stand by a conservative MP over a government tax decision will be well received.
Nigel Mills MP has asked the Exchequer Secretary, David Gauke, to reconsider the government’s decision over the ‘Section 58’ rule. This ruling, which would have seen requests for backdated tax from contractors who worked under previously legal offshore schemes, would potentially cause huge tax bills for some.
Mr Mills suggested that more than 2,000 people could be caught by this backdated tax rule, and said that whilst the scheme was “noxious and should have been closed”, those who used it were not necessarily the high-earning multi-millionaires but perhaps some relatively low earning IT contractors. He continued;
“Was it right to give people the expectation over many years that the scheme was legal; to have suggested in “Technical Exchange – Issue 63” that HMRC did not think it could successfully litigate against the scheme; and to impose a retrospective provision that applied for ever? I am not sure that that is a sensible way of conducting tax policy, or a fair way of dealing with taxpayers.”
He said that rather than backdating tax payments, it would be better to reconsider any use of retrospection and to simply close the particular scheme down. Mr Mills added that undertaking a review at this point would be “better and fairer for the taxpayer.”
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