HMRC has been accused of profiteering from self-employed workers over the rate it charges on late payments. Analysis shows that while taxpayers have been charged 7% on late payments, those who are owed a refund from HMRC receive interest of just 3.5%.
Julia Kermode, founder of IWORK, said “HMRC is profiteering from self-employed workers at the worst possible time. Hundreds of thousands of people are being hit with needlessly high interest on late payments. All the while, HMRC gives itself an easy ride, paying half of the amount of interest that it charges. It’s unbelievably unfair.”
Emma Rawson, technical officer for the Association of Taxation Technicians, said “HMRC’s justification for the difference in rates is that it is in line with the policy of other tax authorities worldwide.” She added that “at a time when taxpayers are really feeling the squeeze, it feels unfair to have such a big difference in HMRC’s favour.”
Martin McTague, national chair of the Federation of Small Businesses, said “It’s hard not to see this as an imbalance that penalises small businesses and the self-employed, who often operate on razor-thin margins.”
“From a principled standpoint, HMRC should maintain a common interest rate whether it’s money flowing in or out of its coffers, embracing fair play rather than double standards.”