Clarity about the practicalities of Making Tax Digital; no knee-jerk reactions and guidance about appealing IR35 are what supporters of freelancers want in Wednesday’s Budget 2017.
Calling for clarity, accounting software provider FreeAgent said the chancellor should decide on the final threshold for when self-employed people will be required to comply with ‘MTD.’
Philip Hammond must also specify exactly what information freelancers will be expected to file when providing their ‘at least’ quarterly, online tax updates, the provider said.
“Micro-businesses are generally positive about the overall idea of digital tax, [but] they still require more details about how it will actually be implemented,” said FreeAgent’s Ed Molyneux.
However, what freelancers don’t want the Budget to contain are any new measures that “could have serious negative implications” for them, as they have been subjected to enough already, believes the Freelancer and Contractor Services Association.
“We have seen a raft of recent tax policy changes that have penalised the self-employed over the last few years, leaving them financially worse off and under-valued”, said the FCSA.
Its chief executive Julia Kermode is perplexed, as the government purports to recognise the economic importance of the flexible workforce, but then tends to regularly legislate against it.
“[We] appeal to the chancellor to await the full outcome of [the Taylor Review] before making any announcements,” she said, alluding to potential proposals to stamp out false self-employment or unethical, exploitative working practices recently exposed by a BBC probe.
“It is widely acknowledged that this group of workers [freelancers and other flexible workers] have played an important role in the UK’s economic recovery to date so I would call on the policy-makers not to penalise them any more”.
Another last-minute appeal to Mr Hammond is being sounded by the ATT, a tax group. They want guidance on Wednesday on how incorporated freelancers can contest the IR35 status decision that their public sector clients are required to make from April 6th.
“There has been little debate or guidance on how such a worker can contest or appeal decisions of the public sector body,” said the Association of Taxation Technicians.
“Under the draft legislation published by the government, the worker appears to have no apparent recourse to appeal the public sector body’s decision.”
The ATT is also concerned about the lack of clarity on which organisation should be paying secondary Class 1 National Insurance, paid by employers, because of the April changes.
Some workers will also have concerns about how the changes will affect their access to tax credits and how they should treat dividend payments, so the association wants guidance from HMRC.
“We are concerned that workers may not have the clarity on their tax responsibilities and rights before the changes go ahead in the public sector in April 2017”, said the ATT’s Michael Steed. “This will set a worrying precedent if the changes are rolled out to the private sector in the same style in the future.”