Welcome to the September 2024 Newsletter from Beatons Group

Freelancers have urged Chancellor Rachel Reeves to use the upcoming Autumn Budget to make the UK tax system 'fairer and simpler'.

Meanwhile, HMRC has stated that £19 billion in unpaid taxes is 'unlikely to be recovered'. The amount accumulated as a result of tax debt going uncollected and HMRC experiencing a plethora of customer service failures.  

Freelancers want to see fairer, simpler tax system from Autumn Budget

Freelancers want to see Chancellor Rachel Reeves use the Autumn Budget to move towards a fairer, simpler tax system, according to the Association of Independent Professionals and the Self-Employed (IPSE).

IPSE's research found that 80% of freelancers believe that government tax policies, such as IR35, are harming their businesses.

Meanwhile, just under half of freelancers reported having less confidence in the UK's economic outlook for the coming year compared to the past 12 months – down from 63% in findings from Q1 2024.

IPSE's Director of Policy, Andy Chamberlain, said: 'For the past two years, the impact of record high inflation has been the main story in the business world. But for millions of freelancers, who are our very smallest businesses, the biggest barrier to growth has always been the tax system.

'This is about more than just rates of tax. Convoluted tax rules like IR35 are crushing freelancers and the businesses they've worked so hard to build.

'Rachel Reeves faces her first big test as Chancellor with a Budget in October and has made no secret of the need to raise money. But freelancers will be hoping that the Chancellor is also open to building a fairer, simpler tax system for millions of sole proprietors going it alone.'

£19 billion in unpaid taxes 'unlikely to be recovered'

HMRC has stated that it is 'unlikely to recover' over £19 billion in unpaid taxes, which have accumulated as a result of uncollected tax debt and a plethora of HMRC customer service failures.

HMRC's latest annual report showed that the total amount of unpaid taxes has risen to £43 billion. According to HMRC, the proportion of these unpaid taxes now considered unlikely to be recovered has increased to 45% from 32% in 2023.

According to the report, HMRC customer service failures have also contributed to the issue. The report showed that every customer service target set by the previous government has been missed.

Data revealed that almost 56,000 taxpayers were cut off after being on hold to HMRC for over an hour, and the average wait time for phone calls to HMRC rose to 23 minutes and 14 seconds – representing a 42% increase when compared to 2023.

A spokesperson for HMRC said: 'We do everything we can to help those who engage with us to get out of debt. With research and development claims, public money is at stake, which is why we have increased compliance activity.'

ESSENTIAL TAX DATES FOR SEPTEMBER

1 September
New Advisory Fuel Rates (AFR) for company car users apply from today.

19 September      
PAYE, Student loan and CIS deductions are due for the month to 5 September 2024.

30 September      
End of CT61 quarterly period.

QUOTE OF THE MONTH

'A stamp duty bill can be thousands of pounds, so if people don't have that amount lying around, they'll probably need to borrow more to cover the tax on their home.'

Jonathan Stinton, Head of Intermediary Relationships at Coventry Building Society, commenting on official data that showed that homebuyers paid £1.2 billion in stamp duty in July 2024.   

ON OUR WEBSITE

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