Taxpayers warned over HMRC charging £3.5 billion too much26

A spike for the .gov Personal Tax Account website looks assured, as the taxman is found overcharging taxpayers by £625 each.

The taxman making false assumptions about "dividends or freelance work" is one of the key contributors to him overcharging taxpayers — by a hefty £3.5billion.

Accountants UHY Hacker Young uncovered the swingeing figure – applicable to income tax last year — which is based on 5.6million Brits paying HMRC more than they owed.

Last night, tax experts told Moore News of their shock at the £3.5bn overpayment, which averages £625 too much per taxpayer going to HMRC.

'Contractors should check they're not among the HMRC overpayers'

Dolan Accountancy said it was "staggering," and "at a time when every penny counts," it urged contractors to 'check you're not one of the HMRC over-payers.'

DNS Accountants called £3.5bn "astonishing," but warned that contractors are at greater risk due to the "complex nature of their income streams."

Carolyn Walsh, a former tax officer, told Moore News that HMRC isn't required to flag up overpayments, because it expects everyone to correct any errors via their Personal Tax Account.

'Incorrect tax codes, partly due to dividend or freelance work assumptions'

Even the income tax disclosure of charging £3.5bn that it wasn't due didn't come from HMRC coming forward.

Instead, UHY Hacker Young had to prise the figure out of officialdom by using freedom of information rules.

"This overcharging through the PAYE system largely stems from HMRC issuing incorrect tax codes," UHY Hacker Young said in a statement.

"HMRC issues the incorrect tax codes due to…[four reasons, including] incorrect assumptions about an employee's additional income, such as rental income, dividends or freelance work that they are no longer doing."

'Common causes of overpaying'

According to Chart Accountancy, "common" causes of overpaying tax include outdated codes, delayed payroll updates, multiple jobs, and unrecorded changes in income/benefits.

"Missing pension contributions that are not reflected in the tax code also result in workers paying more tax at source than they should," Justin Go, personal tax accountant at Chart Accountancy, told Moore News.

"The problem is worse for higher earners who no longer have to file Self-Assessment.

"Many rely solely on HMRC's automated Simple Assessment to reconcile tax, which may be delayed, contain errors, and give only a limited time to respond. Missed corrections can lead to HMRC demanding payment or automatically coding it into the next year."

'Regularly checking your PAYE record and tax code is essential'

Chart's Mr Go continued: "And even lower earners can be affected if small benefits, incorrect pension deductions, or other employment changes are misapplied.

"[Regardless of taxpayer-type, HMRC] leaves the responsibility on taxpayers to monitor their codes. Therefore, regularly checking your PAYE record and tax code is essential to reclaim money lost to HMRC errors."

Previously an inspector of taxes, Ms Walsh said contractors should treat her old boss's Personal Tax Account (PTA) tool in the same way that most now regard online banking.

To read Simon’s article in full, please visit ContractorUK where this article was first published (and where Moore News is the primary editorial supplier.)

Rachel Reeves turns down ‘repeal IR35 reform’ opportunity

Rupert Lowe MP tells Moore News that IR35 reform must be abolished, despite the chancellor ducking his ask that all contractors return to deciding their own IR35 status.

Labour has rejected an opportunity to signal it wants to repeal the IR35 Off-Payroll Working (OPW) rules. 

Kingsbridge, an IR35 insurer, says the rejection means that, ahead of Autumn Budget 2025, IR35 reform “as a concept now won’t be going anywhere, anytime soon”. 

The insurer’s comments came after a minister was asked if Labour would make it party “policy” for contractors to decide their own IR35 status again. 

‘IR35 reform must be scrapped’ 

Asked in the House of Commons by independent Great Yarmouth MP Rupert Lowe, the question was put to His Majesty’s Treasury (HMT). 

Fresh from founding the “Restore Britain” movement, Mr Lowe spoke yesterday to Moore News, insisting that IR35 reform “must” be scrapped. 

Formerly of Reform (which itself has pledged to “abolish” IR35), Lowe in effect asked HMT if it would reinstate the IR35 proposal of mini-Budget 2022. 

‘Truss-Kwarteng revoke IR35 reform pledge blindsided many’ 

The then-Chancellor Kwasi Kwarteng announced that workers operating via an intermediary would “once again be responsible for determining” IR35 status. 

Matt Tyler, IR35 consultancy manager at Kingsbridge, last night recalled the vow from September 2022, which was made under the Liz Truss-led Tory government. 

Tyler said it “blindsided many, contractors and advisers – due to its suddenness”. 

‘Enable contractors to determine their own IR35 status’ 

Kwarteng’s successor at the Treasury, Jeremy Hunt, U-turned the vow just three weeks later, on October 14th 2022. 

And Mr Lowe’s under-the-radar question in the Commons offered Labour an opportunity to support revoking IR35 reform without ‘blindsiding’ anyone. 

But the government has now rejected the opportunity.  

Asked by Lowe on May 30th 2025 if Chancellor Rachel Reeves “will make it her policy to enable contractors to determine their own IR35 status”, a Treasury minister replied: 

“As a result of the reform [to IR35], HMRC estimate an additional £4.2bn has been received in tax revenues, overall, in the period October 2019 to March 2023.” 

‘Labour silence on repealing IR35 off-payroll working rules is perhaps understandable’ 

The answer of June 9th 2025 contains three additional paragraphs. 

But none of them directly answer Lowe’s central query, and all imply support for the OPW framework.  

The government’s full answer, provided by the Treasury’s Exchequer Secretary James Murray MP, is available on the Off-payroll Working ‘Question for Treasury’ page. 

To read Simon’s article in full, please visit Kingsbridge.co.uk, where this article was first published (as part of Moore News’ Branded Journalism package).

‘Don’t do a Rachel Reeves and play with fire on your CV’

A series of LinkedIn edits by the ‘bragging’ chancellor seems at odds with claims that the Treasury boss has been honest.

CV gurus yesterday came across to Moore News as less forgiving than Number 10 Downing Street about three big discrepancies on Rachel Reeves’ CV.

The first discrepancy is the chancellor changing the impressive-sounding “Economist, Bank of Scotland” to merely “Retail Banking, Halifax.”

Made by Reeves on her LinkedIn profile, the self-demotion was forced by Guido Fawkes after the political blog questioned the MP’s role from 2006-09.

‘Six years, four months’

The chancellor’s second CV discrepancy relates to her BoE post of 2000, as its duration has been cut from “a decade” to “6 yrs 4 mos.”

Further relating to Reeves’ time at the Bank of England (BoE) is the third discrepancy which has prompted her to edit her LinkedIn profile.

This second edit concerns the chancellor’s experience.

In fact, the chancellor has now revised the online entry of her BoE “Economist” role, to make clear her time at the bank was split across three distinct titles.

‘Very junior analyst’

The revision was forced by a 2012 tweet by Reeves (which only surfaced this month), in which she described herself at the BoE as a “very junior…analyst”.

Such an entry-level role is at odds with her immodest claim on the eve of Autumn Budget 2024 that, due to her time at the BoE, “I know what it will take to get Britain’s economy back on track.”

Similar rhetoric is now emerging from Downing St.

‘Rachel Reeves has been honest with the public’

The PM’s official deputy spokesperson said (despite only reportedly being asked if CV lies by a minister is a breach of the ministerial code): “I think with regards to the chancellor, the PM is very clear that the chancellor has restored fiscal stability.

“This is someone who, on coming into office, looked under the bonnet and exposed a £22 billion black hole in the public finances, and has been honest with the public.”

The claim of ‘honesty’ sticks in the craw of CV expert Rebecca Pay, who specialises in reviewing and writing resumés and LinkedIn profiles for senior leaders.

‘Be honest on your CV’

“The Reeves story should serve as a wake-up call. Be honest on your CV, especially with dates,” Ms Pay, the founder of CV advisory Pay for Precision, told Moore News.

“Sure, rounding up a figure or boosting your role a little might not break the world, but outright fabrications? That’s a different game.”

‘Hiring fraud includes falsifying a CV’

Anti-fraud hiring expert Keith Rosser, a director of Reed Screening sees acceptable and non-acceptable too.

“Hiring fraud includes falsifying a CV. [But] when is it ‘fraud,’ and when is it a slight error?

“Whatever it is [in the case of Rachel Reeves],” says Mr Rosser, “it raises the question, ‘How truthful should our CVs really be?’”

‘Honesty builds trust’

Natalie Bowers, founder of niche IT contractor jobs agency Bowers Partnership, tried to cut to the facts of the Reeves’ CV furore.

A veteran recruiter for London’s Square Mile, Ms Bowers told Moore News: “Reeves may have pumped up her Bank of England experience.

“And she has bragged about being an economist…but [now she] fesses up she was in [non-descript] ‘Retail Banking.’

“This whole sizzler highlights the need for transparency, as in any job honesty builds trust. Right, Rachel?!”

‘Trifle vague’

According to the CV & Interview Advisors (CVIA), a few aspects of a CV may require job-seekers — even chancellors perhaps — to be vague.

“Now Halifax is part of BoS [Bank of Scotland] there’s not really an issue, but changing ‘Economist’ to ‘Retail Banking’ potentially raises more eyebrows,” the CVIA told Moore News.

“It’s worth considering that ‘Retail Banking’ isn’t really a job title; it’s more the area of the bank [that Ms Reeves now says she worked in].

“It seems a trifle vague. But that in itself is actually an acceptable tactic if a job title isn’t in your favour.”

‘Don’t play with fire, as you don’t have a safety net’

But Pay for Precision cautions that a single untruth might be enough to stop a candidate from getting to the interview stage.

“Employers can, and will, check the facts, and if they uncover a major lie, it could cost you your job,” the CV rewriter for senior leaders warns. “Now, Reeves might get away with it — the system always protects its own, but most of us don’t have that safety net. The lesson? Don’t play with fire.

“Keep your CV honest, and make sure everything — dates, titles, responsibilities — aligns with your LinkedIn profile.”

Pay for Precision’s boss Rebecca Pay continued: “Get that right, and you’ll be lining up the interviews in no time. Cutting corners isn’t worth the fallout.”

To read the full article by Simon Moore of Moore News, please visit ITContracting.com, where this article was originally published.

Is the ‘Spongebob Plan’ pants, or a fair and square way to close a company if you’re skint?

An unpicking of whether ‘DIY Company Closure’ still does the business, or is just comic misadventure.

Not before time, The Insolvency Service has finally as good as admitted to Moore News that “The Spongebob Plan” – hatched here on UK Business Forum (UKBF) – stands up to scrutiny.

A timely, overdue clarification from The Insolvency Service…

Based on guidance it handed this week to Moore News, the government agency’s all but admission is desperately needed in the current climate.

Yes, inflation is meant to halve to 2% by April, but the UK is still in a cost-of-living crisis; so still in an environment where a skint, insolvent company director must know that the appointment of an Insolvency Practitioner — if they cannot afford one — is not required by law.

It’s a shame that The Insolvency Service’s own six-part online guidance, “Options when a company is insolvent,” doesn’t make that crystal clear.

The online guidance doesn’t put this key fact that it is permissible to ‘Do It Yourself’ on company closure, without the need for an Insolvency Practitioner (IP), beyond doubt.

‘Legal’

Highlighted by the Insolvency Service to Moore News, in response to whether the ‘no frills’ plan by UKBF user “Spongebob” still holds water; some 11 years later, The Insolvency Service online guidance mentions ‘legal’ six times.

Reassuring, right?!

Unfortunately not, because none of those six mentions of what’s lawful relates to The Spongebob Plan’s central ‘hinge’ — that there is no requirement in law to appoint an IP.

[N.B. For the purposes of this article, The Insolvency Service confirmed to Moore News that the appointment of an Insolvency Practitioner is NOT a statutory requirement when closing a UK limited company.]

Hinge and bracket

But if that’s the ‘hinge’ of The Spongebob Plan,’ then what surely represents its ‘bracket’ (i.e. its second most key principle), which is that there is no legal requirement to place an insolvent company into voluntary liquidation, isn’t unequivocally addressed in The Insolvency Service’s guidance either.

Perhaps this two-fold omission by The Insolvency Service is why some advice by IPs may seem a tad ambiguous.

That is, assuming you’re brave enough to ask what they, as Insolvency Practitioners, make of The Spongebob Plan -- a.k.a the ‘Don’t use an Insolvency Practitioner’ plan!

Skin in the game

But maybe it’s understandable for a reason other than they’ve ‘got skin in the game,’ that IPs are tight-lipped.

If the government’s own body in charge of insolvency isn’t proactively making clear neither the hinge of The Spongebob Plan (no statutory requirement on directors to use an IP), nor its bracket (no statutory requirement to put an insolvent company into voluntary liquidation), then who are industry bods to speak up and say otherwise?

Do the duties of a company director expire?

Yesterday, from Brian Burke, managing director at Quantuma, there was no endorsement of The Spongebob Plan.

Burke told Moore News that when insolvent or at risk of being insolvent, the duties of a director don’t expire because the company’s liabilities exceed its assets or it cannot pay its bills (‘insolvency’); those duties just switch.

“Duties switch to a requirement to take decisions for the benefit of the company’s creditors as a whole,” Mr Burke told Moore News.

“The duty owed to shareholders will be secondary; while the interests of shareholders remain relevant during any period in which the company is, or may be, insolvent, the directors must act in what they consider to be in the best interests of the company’s creditors.”

To some directors, then, putting out a line to creditors that they know or hope won’t be acted on (as per Spongebob’s invite for them to wind-up the company themselves), might smack of duty-dereliction.

Are directors under a legal obligation to personally fund company liquidation?

Insolvency Practitioner Lisa Thomas doesn’t sound like she’ll be advising too many directors to take the punt, even though, refreshingly, she confirmed her services aren’t compulsory if you’re a company wanting to close.

Ms Thomas, an IP at Parker Andrews, told Moore News: “Where a company cannot afford liquidation, directors are under no obligation to personally fund it.

“If they are unwilling or unable to fund, any dissolution is likely their only option -- assuming a creditor doesn’t enforce compulsory liquidation.”

What makes HMRC object to dissolution?

 In a generally cautious statement to Moore News, Thomas suggested ‘Spongebob Plan directors’ can likely get to their destination, in exchange for the odd sleepless night.

“HMRC and most banks automatically object to dissolution where there are outstanding tax returns and debts. However, Companies House will eventually strike the company off for non-filing of statutory returns.

“[But] the potential risk for directors is that The Insolvency Service can investigate the company post-dissolution,” Thomas says. “[And it has] powers to disqualify and/or issue compensation notices against the directors personally if there has been wrongdoing.”

Is dissolution considered a last resort?

Daniel Plant, boss of The Liquidation Centre, told Moore News: “Dissolution is the last resort which we find directors only consider if the first two routes are not possible.

“The first route is the director personally paying for a CVL [Creditors’ Voluntary Liquidation]. The second is writing to creditors to invite them to wind up the company through the courts – also known as Compulsory Liquidation.

“But it’s unlikely that a creditor will want to do this, as it will cost them thousands of pounds with little-to-no prospect of a return.”

Do most Insolvency Practitioners offer a free consultation?

Speaking to Moore News, Plant sounded aware that hiS talking about ‘thousands of pounds’ and ‘personally paying’ might be a bit rich for directors in financial distress.

“Most, if not all, IPs will give you a free, initial consultation,” SFP’s boss pointed out. “As they say, ‘knowledge is power’ and you’ll be placed in a far stronger position understanding your options; knowing ways to mitigate risk and identifying any hot-spots of personal exposure.”

A longer version of this article is available at the SME community website UK Business Forums, which commissioned Moore News to investigate ‘DIY Company Closure’ and speak to The Insolvency Service about its legality and viability.