Reform of IR35 administration moves a step forward

Contractor accounts might be interested to learn that dedicated helplines are going to be set up by the government to improve IR35 administration.

David Gauke, the exchequer secretary to the Treasury and John Whiting, the tax director of the Office of Tax Simplification, have confirmed that the legislation will not be abolished and the government will not introduce a business test to determine whether or not individuals are self-employed.

Gauke has now announced that as well as hiring specialists to man the helplines, guidance will be published on the cases HMRC consider to be outside the scope of IR35. Furthermore, reviews will be restricted to high risk cases and the Revenues new approach will be closely monitored by the IR35 forum. He also confirmed that everyone who was involved in the initial review of IR35 will be invited to join the forum.

Mr Gauke explained that it was not appropriate to implement a business test because it would be hugely challenging to come up with a test that would work for both HMRC and businesses.

Meanwhile, Anthony Thomas, the incoming president of the CIoT, has said the relationship between the tax body and HMRC is now at its worst ever level.

He says his goal is to turn things around and return to the healthy relationship that existed between them 10 and 20 years ago. Thomas is also critical of HMRC’s plan to indirectly regulate the tax community and the Revenue’s stance over the registration of tax agents.

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