Cllr Martin Wrigley: Government must "stop putting paperwork over people"
Liberal Democrat Parliamentary Spokesperson for Newton Abbot and Councillor for Dawlish, Martin Wrigley has called upon the Chancellor to be "on the side of the self-employed", as a million people face being slapped with a tax bill on money they never earned.
Income tax bills landing at the doors of the self-employed and freelancers of this country at the end of July will be calculated based upon their earnings in 2019-20 - neglecting the impact of the Covid-19 pandemic on business and trade.
Martin and his Lib Dem Colleagues have set out five urgent actions required of HMRC to take into account Covid losses on earnings, focused around clear and proper communication with taxpayers.
"Covid-19 has wrought havoc on the self-employed in Devon and across the country. Tradespeople, hairdressers, cleaners, childcare providers and millions more have seen their incomes evaporate, as their businesses ground to a halt and people rightly stayed at home to save lives.
"Yet in a week's time, they face being slapped with a bill from HMRC that does not recognise this, because the calculation will be based on how much they earned before the pandemic.
"HMRC needs to show strong leadership by being on the side of the self-employed in this country. Placing the onus on a legion of sole traders and freelancers, who contribute so much to our culture and economy, to foot the Covid bill is the complete antithesis of strong leadership.
"No one must be left behind as we look forward to a green recovery from this pandemic. It's time to stop putting paperwork over people."
Contact: Melissa Muir 07717942961
The five urgent actions are:
- All letters and self-assessment demands sent to taxpayers for "payment on account" must show people very prominently that they are entitled to re-assess themselves in relation to what they did actually earn, reject the HMRC's tax estimate and pay instead a more accurate amount - potentially even claiming a refund.
- While information about self-reassessment options is included normally, my plea to you and HMRC is that this year, this information must be far more prominent and far more taxpayer-friendly, with proper explanations, references to helplines and making it clear that a phone call may be all that is needed to avoid paying these inaccurate tax demands.
- HMRC should state clearly in these letters, on its website and publicly via all available channels that it accepts estimates for "payment on account" may be seriously inaccurate this year and that HMRC is urging the self-employed and other taxpayers affected to get in touch if they have any questions.
- HMRC should also drop any interest rate penalty for people who choose to pay a lower amount of tax on account for reasons related to Covid losses, but then discover their own calculations were themselves inaccurate.
- HMRC should finally give much greater prominence to "time to pay" options too.