23rd November 2011

Plans to tackle contractor tax avoidance announced

The government is gearing up to tackle contractor tax avoidance and other problems relating to people hiding their earnings.

A recent report from the Treasury, compiled by Graham Aaronson QC, looks at measures to tackle tax avoidance and the problem of people moving finances offshore in particular.

According to Brendan Barber, general secretary of the TUC, the proposals outlined in the publication would “make it far harder for the super-rich to hide behind tax loop-holes and avoid paying their fair share of taxation”.

He added: “Unfortunately, abuse of the UK tax system is widespread amongst major companies and wealthy individuals. At a time of austerity when ordinary people are so hard-pressed financially, it's morally wrong for ministers to tolerate corporate tax avoidance on such a grand scale.”

Contractors might want to check that their own finances are above board to ensure that they are not caught out by any new changes.

Mr Barber added that the changes need to be implemented in a manner that allows HM Revenue & Customs to effectively target companies and individuals, and some precautions need to be added to cover National Insurance and Stamp Duty, which make up a substantial proportion of the taxes that are avoided in the UK.