“The government’s desperate attempts to generate additional tax revenues are undermining the impartiality of the UK’s justice system,” says ContractorCalculator CEO, Dave Chaplin, commenting on the High Court’s ruling on the Dragonfly Consulting Ltd appeal.
The ruling is a fundamental blow to the British legal system, as it effectively removes the rights of flexible highly skilled UK contractors and their clients to settle on their working relationship. “According to this ruling,” explains Chaplin,” HMRC now has arbitrary powers to dictate who is a contractor and who is an employee, regardless of the client’s or professional freelancer’s wishes.”
The input of the contracting sector to the strength of the UK’s engineering, IT, construction and financial industries has not been considered or recognised by government, Chaplin believes, and so contractors have endured two decades of harassment by tax authorities for their efforts.
“The Dragonfly ruling has the potential to be another nail in the coffin of flexible working in the UK, by an administration that simply does not get the concept of a highly reactive and skilled workforce that has brought so much prosperity to the country,” he continues.
“This ruling basically means HMRC and the Treasury will be able to raise additional tax revenues where they see fit,” explains Chaplin, “resulting in increased fears by any contractor that they could be targeted for an investigation and be forced to pay back taxes, National Insurance Contributions and, adding insult to injury, penalties.”
But Chaplin believes that such heavy-handed tactics must be stopped, for the good of UK PLC. As a recent Law Commission report details, he points out, there is a need for individuals to have a mechanism for redress for the failings of public sector bodies, like HMRC. “After all,” he explains, “they have the ability to operate outside the boundaries of the one part of common law taken for granted by most – that you are innocent until proven guilty.
“The days of HMRC’s bullying tactics regarding contractors are numbered,” continues Chaplin, “because without this vibrant sector the UK would not be the location of choice for so many global businesses and SMEs.”
Note to editors:
ContractorCalculator is a leading independent website for the UK contracting industry--most of whom are highly skilled workers in information technology, engineering, electronics, and construction. In March 2008 ContractorCalculator was visited by over 100,000 visitors (verified by ABCe).
There are close to half a million such workers in the UK today who prefer to run their own businesses and work under contract rather than become employees of specific companies. Their contribution to the economy is crucial to keeping our business competitive. Our websites have tracked this industry since 1999.
Dave Chaplin can be contacted at ContractorCalculator on 0871 218 5152.