HM Revenue & Customs warned about “Bills of Exchange” being promoted to flexible and gig-economy workers as a way to settle tax liabilities or pay debts owed to HMRC. Promoters claim workers can use these instruments to avoid tax, but the mechanism has no legal standing in UK tax law. HMRC stated that recipients decide whether to accept a Bill as payment, and that acceptance does not remove tax responsibilities. Anyone involved remains fully responsible for unpaid tax, plus interest charges and potential financial penalties. The warning forms part of a broader crackdown on marketed tax-avoidance schemes targeting self-employed people, contractors, and workers in non-traditional employment where tax obligations can be complex.
"HM Revenue & Customs has issued a warning to around 700,000 flexible and gig-economy workers about the use of so-called "Bills of Exchange", amid concerns that individuals are being drawn into tax-avoidance arrangements with potentially serious financial consequences."
"Officials said promoters are falsely claiming that workers can use Bills of Exchange to settle tax liabilities or pay debts owed to HMRC, despite the mechanism having no legal standing in UK tax law. HMRC stressed that anyone participating in such schemes remains fully responsible for any unpaid tax, along with interest charges and financial penalties that may be imposed."
"The warning comes amid a broader crackdown on marketed tax-avoidance schemes targeting the self-employed, contractors, and those in the rapidly expanding flexible labour market. Authorities are increasingly concerned that misleading online promotion and word-of-mouth marketing is encouraging individuals to enter arrangements they believe are legitimate alternatives to standard tax payments."
"HMRC states: "A Bill of Exchange is defined in the Bills of Exchange Act 1882. It is a note from one person to another, requiring that person to pay a certain sum of money to them or to a third party." "However it is up to the recipient to decide whether or not to accept the Bill as a form of payment.""
Read at London Business News | Londonlovesbusiness.com
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