End tedious tax trouble now!
THE TAX at source virus has been raising temperatures among freelances again of late - seemingly as a result of a new generation of freelances encountering the venerable bug and bugbear rather than a fresh onslaught by the Inland Revenue.
But there is no need for any genuinely self-employed freelance to sit there and take it. This is a campaign which the NUJ largely won a couple of years ago.
Essentially, to be taxed at source means that the IR is forcing the client company to treat the freelance as employed - to put them on Pay As You Earn. This mistake arose 20 years ago from the IR's deluded belief that a person need only be working in a client's office and on their equipment to be classified as employed, regardless of wider circumstance. Hence they mostly hit people who work shifts, such as subs.
While some profligate souls actually like to pay their tax up front in this fashion for fear of failing to save up, most detest the reduction from cash-in-hand by over 30% (including National Insurance) - and hate losing the right of the Schedule 3 self-employed to claim expenses such as travel and meals against tax.
The IR were, however, wrong. Though the NUJ has never persuaded it to rescind the contra-legal blanket rulings issued to companies, we now know how to successfully appeal almost every individual case. (The exception is where a full-time job has been casualised - and our objective there would be to seek restoration of full employment rights.)
The near-magic wand is an adapt-to-your-circumstances draft letter, available from the freelance office. Addressed to your tax office or possibly the client's, it sets out the reasons why, on the requisite "balance of factors", your work for the particular client should be classed as part of your self-employment.
It works, mostly. Imagine: with one bound - and a modest amount of correspondence - you could be free.
© 1999 NUJ & contributors