The Leader of the Liberal Democrats Ed Davey has called upon the Chancellor to be “on the side of the self-employed”, as a million people face being slapped with a tax bill on money they never earned.
Income tax bills landing at the doors of the self-employed and freelancers of this country at the end of July will be calculated based upon their earnings in 2019-20 – neglecting the impact of the Covid-19 pandemic on business and trade.
In a letter to Chancellor Rishi Sunak, Davey sets out five urgent actions required of HMRC to take into account Covid losses on earnings, focused around clear and proper communication with taxpayers.
Leader of the Lib Dems Ed Davey MP writes in the letter to the Chancellor: “Covid-19 has wrought havoc on the self-employed. Taxi drivers, hairdressers, cleaners, childcare providers and millions more have seen their incomes evaporate, as their businesses ground to a halt and people rightly stayed at home to save lives.
“Yet in a week’s time, they face being slapped with a bill from HMRC that does not recognise this, because the calculation will be based on how much they earned before the pandemic.
The letter goes on to state: “HMRC directed by you needs to show strong leadership by being on the side of the self-employed in this country. Placing the onus on a legion of sole traders and freelancers, who contribute so much to our culture and economy, to foot the Covid bill is the complete antithesis of strong leadership.
“No one must be left behind as we look forward to a green recovery from this pandemic. It’s time to stop putting paperwork over people.”