HM Revenue & Customs are making cutbacks in paperwork, which could affect some contractors and freelancers with agents or tax advisors. HMRC has been looking at ways to cut costs without having a detrimental effect on customers. Stopping the issue of some forms to agents and advisors will save in excess of £1.25 million. It is the usual practice for copies of Coding Notices and Tax Calculations to be issued to an advisor, but some of these forms will no longer be issued in a bid to save money.
As many contractors rely on this service, which allows their agents to receive important documents, this measure could have an impact on anyone who doesn’t take care to send a copy to their agent or advisor. Contractors will have to make their agents aware of any changes to tax codes or calculations issued if they want their records to be kept accurately. HMRC has to make substantial savings, and this is one area that will cause minimal disruption to taxpayers.
Coding Notices will be withdrawn from December 2010, which is when the annual coding run takes place for the next tax year, 2011-12. A message will be included advising customers to forward the coding notice to their agent. Tax Calculations to agents has been discontinued with immediate effect, and again has a message prompting contractors to show the assessment to their agent.
Umbrella company contractors will not generally be affected by this service being discontinued as they have deductions of tax and national insurance made directly from their income. A contractor who works through an umbrella company should still ensure their tax code is correct in all cases.
Some Self Assessment forms are being removed from service and include notification of the unique taxpayer reference to your agent as well as letters telling customers that a tax return is no longer required. Agents will now rely on their clients for this information.
