IPSE criticises IR35 rules after HMRC tribunal defeat

(2 minutes to read)


After a recent tribunal defeat for HMRC, the IPSE has said that this case simply demonstrates once again the ‘ludicrous complexity’ of IR35 tax law.

This latest case involves IT contractor Ian Wells successfully appealing an HMRC tax bill for over £26,000 after being caught under IR35 tax law, with Judge Jennifer Dean saying: “the level of control falls far below the sufficient degree required to demonstrate a contract of service.”

The Association of Independent Professionals and the Self-Employed (IPSE) believes that this situation with Mr Wells is just the latest innocent independent contractor to be caught out by the complexity of IR35 and pulled into a long and costly tribunal case.

Andy Chamberlain, IPSE’s Deputy Director of Policy, said, “This latest defeat suggests IR35 is so ludicrously complex that not even HMRC can understand it.

“Ian Wells is yet another self-employed person who has been pulled into a pointless, costly and drawn-out IR35 case by HMRC, only to be spat out at the end of it with a judgement that the case shouldn’t have come about at all.

“If HMRC, with all its resources and expertise, cannot make an accurate IR35 determination, how can it expect anyone else to get it right? The Government must urgently reconsider any proposals to shove responsibility for determining IR35 status onto end clients.

“This judgement also raises serious questions about HMRC’s Check Employment Status for Tax (CEST) tool, which was created supposedly to simplify IR35. If HMRC used the tool to check Mr Wells’s status and still found that he should be caught by IR35, then it confirms what us and many others have said previously: the tool is fundamentally flawed and should be scrapped.”

Working in the Public Sector and wondering if your contract is inside of IR35? please give us a call on 01206 591 000 or email info@contractorumbrella.com to discuss your contract.

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