Confusion rumbles on in the world of IR35

(2 minutes to read)

HMRC has recently indicated four key areas where it is allegedly promising to make changes to IR35 processes, but of course we’ll believe it when we see it! It is currently seeking ‘specific detailed comments’ on how to make improvements to its IR35 helpline, contractor guidance, status review and investigation processes and has also said that it wants to improve how the risk of contractors being caught by IR35 legislation is assessed. Which would be great, if it happens . . .

Members of the IR35 Forum who are non-HMRC have been asked to talk to members and colleagues about these four key ‘framework areas’ because HMRC is ‘concerned that there was a risk that not enough detailed, specific information was being provided about areas where it was perceived HMRC needed to improve its administration of IR35’. Confused? You will be! According to the minutes of the latest IR35 Forum meeting, HMRC has confirmed that, whilst it will share its ‘broad risk assessment’ with the Forum, it will not share ‘detailed risk profiling’. So whether contractors and their advisers and agents can use this assessment to establish IR35 status and therefore understand their tax liability better is anyone’s guess.

To deal with some of the many grey areas, HMRC plans to create 12 scenarios based on real cases which will be designed to help contractors to identify ‘where there is agreement or disagreement with HMRC’ and where there is uncertainty. As far as we are concerned, whilst there might be an appearance of HMRC trying to simplify things, it’s all still pretty much one big ‘grey area’ and best avoided by working through an umbrella company like Contractor Umbrella!

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