The number of tax tribunal cases waiting to be heard has increased more than sevenfold compared to the same quarter last year, from 1,200 in at the end of June 2021, to 10,000 in at the end of June 2022, according to law firm Pinsent Masons.
HMRC explains that this is a result of the large number of cases it is bringing against ‘umbrella companies’ that have underpaid VAT. It says many umbrella companies have wrongly claimed their contractor’s earnings are VAT-free. HMRC is looking to clear the backlog as soon as possible, as a small number of cases will be brought forward as a test and the results will be applied to all the other cases.
Steven Porter, partner at Pinsent Masons, commented: ‘HMRC sees the tax affairs of contractors as an area where it is missing out on a lot of unpaid tax. Umbrella companies are firmly in its crosshairs.’
The number of tax tribunal cases waiting to be heard has increased more than sevenfold compared to the same quarter last year, from 1,200 in at the end of June 2021, to 10,000 in at the end of June 2022, according to law firm Pinsent Masons.
HMRC explains that this is a result of the large number of cases it is bringing against ‘umbrella companies’ that have underpaid VAT. It says many umbrella companies have wrongly claimed their contractor’s earnings are VAT-free. HMRC is looking to clear the backlog as soon as possible, as a small number of cases will be brought forward as a test and the results will be applied to all the other cases.
Steven Porter, partner at Pinsent Masons, commented: ‘HMRC sees the tax affairs of contractors as an area where it is missing out on a lot of unpaid tax. Umbrella companies are firmly in its crosshairs.’
