Highlights: HMRC releases IR35 Forum minutes

Held on the 6th of May, the IR35 Forum was created by HMRC to enact recommendations made by the office of tax simplifications, they recommended to the chancellor that if IR35 was to be kept then its administration had to be improved.

The forum will help to decide which parts need improving and how to improve them. Here is a summary of the key points.

“HMRC agreed that those who were clearly outside the ambit of IR35 should be given assurance through clear guidance that that they did not need to worry about IR35 and said that it would value the Forum’s help in commenting on its draft guidance.

HMRC said that it believed that the broad strategy should be to:

• Enable taxpayers to decide whether HMRC viewed them as low, medium or high risk (and to make sure that that segmentation was transparent);
• Provide effective targeted guidance for each segment; and
• Where reviews of high risk cases were undertaken, to ensure such reviews were carried out as quickly as possible with as least disruption as possible

It was suggested that it would be very useful if HMRC could, with the help of the Forum, develop a tool analogous to the Employment Status Indicator. It was noted that a particular difficulty was the fact that a contract between the intermediary and the agent, might not reflect the same terms as the contract between the end client and the agent.”

This certainly is promising, the release of a tool from HMRC that lets you evaluate on your own your risk and employment status would certainly improve the current situation and would definitely prove worthwhile. The next meeting is on the 29th of June 2011 so we are hopeful that HMRC and those invited can make some progress by then, but early signs are good.

Source: http://www.hmrc.gov.uk/consultations/ir35forum-minutes.htm