Interim managers and other freelance professionals have expressed concern following newspaper reports that tax inspectors are planning to clamp down on people before they break the law.
The recent report in the Daily Telegraph said that that a new code of practice for tax inspectors, which was issued in September, contains a key passage on defining tax avoidance.
It says avoidance is not defined in the Taxation Acts. One definition is a situation where less tax is paid than Parliament intended, or more tax would have been paid, if Parliament turned its mind to the specific issue in question. At a practical level the problem is then essentially one of deciding what Parliament would have intended and identifying who should be asked to decide this.
The guidance has provoked a strong response from the Professional Contractors Group (PCG). Chris Bryce, Chairman of PCG said that HMRC must act within the law of the land.
He went on to say that according to the latest legal advice, if HMRC ever did take anything to court on these grounds it would be thrown out and fined heavily.
PCG will be seeking urgent clarification of this issue from the Minister with responsibility for HMRC.