100% Increase in IR35 Yield For HMRC
October 28, 2011 
3 Comments
The average yield that HMRC get for every IR35 case where a contractor is seen to be a ‘disguised employee’ has increased by 100% according to new information revealed under the freedom of information act. The information has also revealed that HMRC were managing to collect up to £1,700 per IR35 case until 2006, but this jumped to a staggering £17,000 per case from 2007 to the current tax year.
The improvement in yield shows that HMRC are now targeting the right people and that the IR35 scheme is now working as it should. IR35 was originally launched in the millennium year and since then up until the end of the 2006 tax year, the scheme has discovered almost 4,000 cases and has brought in a total of £6.7 million. Over the past five years however, HMRC have had 332 genuine IR35 cases but still brought in £5.4 million.
The most recent freedom of information request only highlighted the first 6 years of IR35 data, but has been released after a request from PCG, which is the UK’s leading freelancer and contractor association.
The information highlighted however, that in the last tax year, HMRC only brought in £220,000 which has caused for contractors to say that the IR35 rule is not worth the hassle for the small amount of money brought in. A UK chartered accountant agreed, saying that, even when factoring in HMRC’s latest and complete dataset on IR35, the yield still appears “shockingly low.”
So perhaps it’s time that HMRC rethought theirIR35 rules and processes rather than wasting money on a rule that doesn’t work well?
Eh? Where did you get these figures from? HMRC have consistently stated that early years figures are not available, and the later years figures you state contradict government figures published last month. What sources are you using?
“which has caused for contractors to say..”
Who proof read this article??
100% increase from £1,700 to £17,000. Please!