HMRC Outlines Four Areas To Improve IR35 Processes
October 11, 2011 
3 Comments
HMRC recently highlighted at the IR35 forum four areas that they intend to improve IR35 processes. HMRC have been taking comments on how they are able to improve their IR35 helpline, guidance to contractors, status review and processes of investigation. They have also confirmed that they wish to make improvements to their assessment processes surrounding contractors being at risk of being caught by the legislation.
People involved in the forum were asked to discuss the issues with colleagues because HMRC are concerned that there was not enough guidance was being given in the areas that HMRC needed to improve their IR35 processes. HMRC confirmed that they would share their assessment of risk report with the forum members, but would not go into too much detail.
For those not familiar with the legislation, IR35 is a term used to denote tax legislation designed to tax ‘disguised employment’, for example contractors who receive their remuneration through an intermediary. In May 2010 the coalition government announced that they would review the IR35 legislation, and in March of this year, HMRC were urged to make changes to the legislation in order to make it more simple so that contractors were more aware and understood the legislation better.
The objective of HMRC is to maximise the tax intake. Look at their web site and try to discover what kinds of expences can be claimed by a contractor; very difficult is the answer. This is like asking for help from an organisation that does not believe that its remit is to show people how to minimise their tax liabilities. Their help line takes an average of 20 minutes before pickup, their support people give conflicting advice. Their staff in the tax office do not have any understanding of contracting unless you are working in the building industry.
Never have HMRC been able to answer any of my questions regarding IR35 to my satisfaction. Not even when I asked them to confirm whether they thought I fell inside or outside of the legislation.
I now pay my accountant to advise on such matters, which they also have difficulty clarifying certain things.
It’s poor quality and about time higher tax payers/small businesses started getting the support they deserve, especially when the economy is so weak and uncertain for future contracts.
Business, that’s easily defined – it’s other people’s money.
Corporation: An amazing device for obtaining profit without individual responsibility.