IR35 checks will not be made on all contractors
With recent reports stating that IR35 investigations have more than doubled over the past couple of years, contractors will be reassured to hear that the Treasury has confirmed that not all self-employed temporary workers will be forced to prove they are outside of IR35.
The report, carried out earlier this month by publisher Bloomsbury Professional, found that IR35 investigations more than doubled from 23 (2010-11) to 59 (2011-12), and in 2009 there were just 12 people investigated under IR35.
The report also found that HM Revenue & Customs managed to recover £219,000 in the 2010-11 tax year, but in 2011-12 that figure hit more than £1.24 million.
Bloomsbury’s managing director Martin Casimir, said, “The crackdown on IR35 fits in with the wider picture of HMRC taking a much more aggressive approach to all sorts of tax cases where it suspects it is missing out on tax revenue.”
However, it seems that despite popular belief, it is not true that most public sector staff engagements face being checked for compliance with the IR35 legislation. This was confirmed by the Association of Professional Staffing Companies (APSCo), after a meeting with Treasury official Natalie Toms.
The (APSCo) stated, “It’s clear from members’ experiences so far that there has been huge inconsistency in the flow down of these guidelines.
[But] both Natalie and Sarah [Radford of HMRC] were clear that the Treasury guidelines are not about tax avoidance, but rather about stopping disguised employment.”