I’ve been hearing from various sources that HM Revenue & Customs is planning a crackdown on private tutors who aren’t paying their tax.

First, there was an article in the Daily Telegraph in which an HMRC spokesperson told tutors (in bizarrely colloquial terms) that “Now is your chance to come forward and ‘fess up. It will be more expensive if we come and find people.”

Then, there was another article highlighted by a tutor on our tutor forum (thanks, Carrie), which reported that HMRC is using “cutting-edge tools such as ‘web robot’ software” to crawl Gumtree and other websites to home in on people who are trading without telling HMRC.

Finally, I’ve heard reports that tuition agencies are receiving letters from HMRC asking them to provide the names and addresses of tutors who have received payments of £1000 or more, going back over the last three years.

Since tutoring work is often cash in hand, and since it is commonly done in addition to a full-time job, it requires real self-discipline on a tutor’s part to make sure all earnings are appropriately recorded and declared. To help with this, our free e-book for tutors gives extensive advice on tutors’ tax obligations and how tutors can record their income appropriately.

HMRC clearly think that private tuition is a substantial risk area for tax evasion, and have therefore set up a new campaign entitled ‘Private Tuition and Coaching (PT&C)’ which according to their website ‘covers people providing private lessons, regardless of whether they have a teaching qualification, and could include, for example, fitness/dance/lifestyle coaches through to national curriculum subject tutors and others’.

I was curious about what the campaign was about, and so gave their new helpline a call. I was told that, when the campaign gets going in the autumn of this year, private tutors will for the first time be able to come forward and voluntarily disclose earnings which they realise they should have been paying tax on. I was told that a similar initiative has been running for other professions (such as plumbers). It seems a little bit like an amnesty – except that individuals who do so will still be subject to a penalty for tax avoidance.

So why would anyone wish to come forward under such a scheme? The answer was simple – the penalty for voluntary disclosure is lower than if HMRC discover through other means that you have undeclared earnings.

And with their increasingly sophisticated online and offline methods for catching tax avoiders, if you’re at all unsure about your tax affairs, now seems the right time to make sure everything is above board.

Monday 23rd November was National Freelancers Day in the UK, and PCG – the trade association for freelancers – have even created a dedicated website www.nationalfreelancersday.org.uk. In a nutshell, the aims of the day were to:

• highlight the value of freelancers to UK businesses
• celebrate the value of freelancing as a valid career choice, highlighting the community and support network
• lobby the Government to improve clarity and fairness in the tax system for freelancers

Although PCG emphasise the work of freelancers in the business sector (for example, IT, management and marketing consultants) their definition extends to ‘basically, anyone who is working independently in a knowledge–based role’. They also provide a useful definition; freelancers can be said to:

• Be neither employers nor employees
• Be skilled professional workers
• Supply services to a range or succession of clients
• Have commercial (“self-employed”) relationships with their clients
• Work for a fee

There is clearly a cross-over here with independent private tutors, and at least the 2nd and 3rd aims of National Freelancers Day will be of relevance to tutors.

One of the most exciting aspects of National Freelance Day is its free webcast which includes interviews with recognized experts discussing the increasingly important role freelancers will play in the economy. In particular, the respected futurologist Dr James Bellini, discusses how by 2020 the ‘working geography’ of Britain will be totally different from what it is today. Here are some excerpts from what he had to say:

From Pyramid to Pancake

“People will increasingly work from wherever they wish to because of connective technologies … Companies will be much smaller and will be working much on a networked basis – what we call the ‘pancake’ instead of the old ‘pyramid’”

The Importance of the Individual

“The best way to describe the digital future is of a gigantic worldwide conversation in which size doesn’t matter anymore … an individual will be as important as a big company in ten and twenty years ahead because their importance will be the value they can bring to a particular task. So, the future is not about size, it’s not about scale – it’s size-neutral.”

The Need for Personal Branding

“Now and in the future we will increasingly have to rely on our own individual talents and our talents as they fit into task teams or other teams … so the biggest issue that a lot of freelancers will face is their own personal branding. You know, who are they? What do they do? What do they bring to the party? We know, if we pick up a bottle of Coca-Cola what it’s going to taste like. We know if we buy from Microsoft that it’s going to do this job or that job – that’s what a brand does for you. With individuals, though – and they are the future – we have to develop the notion of personal branding, and that is a kind of exercise we all need to go through. I think a lot of the time, people who work for themselves don’t really see themselves as a brand. In the future, they will have to.”

You can watch the full interview here.

While such issues may seem a long way from the private tutoring you may do on a day-to-day basis, it is important to realize that change is definitely afoot. For one thing, as technology continues to facilitate ever-more sophisticated contact between individuals, it will inevitably play an increasing role in tutoring. The degree to which the tuition industry exploits the use of technology is both an exciting and challenging issue, particularly since personal, face-to-face contact is seen by many to be the lynchpin of the tutoring medium.