Robert C., London
“I have been an IT contractor since 2009. When I began freelancing, I didn’t know much about tax, running a limited company, I’d never even had to complete a self assessment before. I knew how to do my job, and that was all I wanted to concentrate on.
One of my new colleagues introduced me to his accountant, who kindly explained what my options were regarding raising invoices, taking payment etc. I was presented with two choices – 1) open a limited company, risk something called “IR35” that I didn’t fully understand and deal with mountains of paperwork; 2) join the legitimate, legal, HMRC-endorsed contractor scheme that he was promoting. The way these options were presented to me – by an experienced, avuncular chartered accountant – left me feeling completely at ease with my decision. Clearly only a moron would risk running their own limited company, when there was a safe, less burdensome alternative.
Suffice to say I gladly signed up, I worked, I invoiced, I made a bit more money. Over the next few years I received the odd “routine” letter from HMRC indicating that they were looking into some of the tax returns that my accountant had submitted. Alarm bells should have been ringing, however every time I spoke to my accountant I was reassured that everything was perfectly fine. This was normal. Nothing to worry about. The scheme was legal, legitimate and HMRC-endorsed.
Last year my girlfriend and I bought our first flat. Our parents put up most of the deposit – we’d put a bit of money aside to renovate it, as it was falling to pieces. Just before we completed I received my first APN from HMRC. They were demanding almost £8000, I had 90 days to pay and there was no way to appeal. I paid the money from our savings.
A couple of months later, I received another demand for nearly £27000. I have been told to expect another £60000 bill before the end of the year. Having lived in our flat for less than 6 months, we have no money left and we’re now facing the prospect of selling our home in order to meet these ludicrous and completely unjustified demands. I feel so completely helpless. I have been taken for a ride by an accountant that I trusted and a government who show no compassion for the impact their poorly conceived policies have on their citizens. I am not rich. I am completely broke, yet I am labelled a “wealthy tax avoider”.