Customer service at HM Revenue & Customs (HMRC) has collapsed, just as the tax deadline approaches.
Delays in dealing with online tax returns have caused a huge backlog and average waiting times for callers have increased from less than five minutes to more than 12 minutes in a year. This adds to the burden many are under - some groups of UK taxpayers have not received any financial support that has been offered to others by the government throughout the coronavirus pandemic due to quirks in the tax system, according to a new report.
The report points to freelancers and other groups of taxpayers that have missed out on more than £80bn in support that has been given to businesses and individuals, including through the employment support furlough scheme. Self-employed taxpayers who moved onto payrolls because of HMRC's IR35 rules €” a piece of legislation that allows HMRC to collect additional payment where a contractor is an employee in all but name €” but were not employed at the relevant time may have become ineligible to COVID-19 support schemes, the report found.
Some commentators point to what they believe to be the UK's outdated tax system as playing a key part in ensuring over 1.5 million self-employed people were excluded from support. Because of the many quirks of this system, government has claimed it is too complex or prone to the risk of fraud to help people such as sole directors of limited companies, PAYE contractors and the newly self-employed.
However, HMRC has never clearly explained the obstacles to getting support to these groups. Some of those who moved onto payrolls, because of the pre-emptive actions of employers, could have received help through the Self-Employment Income Support Scheme had they remained self-employed. Similarly, some other freelancers, with verifiable employment and tax records declared to HMRC, may also have been left out from the government's Coronavirus Job Retention Scheme as in some sectors, such as the creative industries, freelancers often work on a series of short-term employment contracts with gaps in between.
A Committee is calling on the government to publish an explanation of why it can't help those who have been excluded from receiving financial support and to consider the support it can provide for those taxpayers that have missed out on support from the COVID schemes.
About the Author: Glen Callow
