IR35 Forum fails to keep lines of communication open

The IR35 Forum was established in order to provide feedback to the government about the way IR35 is administered, in response to calls from the Office of Tax Simplification to increase transparency and identify specific areas which HMRC could improve upon. The forum was to include representatives from the taxpaying community and professional advisers who could use their knowledge and expertise to advise on how the legislation would work in practice and how different groups would be affected.

This was the stated goal of the IR35 forum, but recent events suggest that the purpose of the Forum has been somewhat side-lined with the publication of the latest set of the forum’s meeting minutes. Not only were these release some four months after the meeting was held, in November 2014, but they also contained some notes which have concerned commentators who believe that transparency is bound to suffer. One of the concerning aspects of the minutes was a note which stated that the membership and terms of reference of the forum are being updated and that the minutes would, in future, be shorter and only record key points and actions rather than details of the discussions which have taken place.

This seems contrary to the stated purpose of the forum itself, and experts are concerned that HMRC are actively seeking to limit the amount of information available about the group’s activities with the proposal to publish less information in the minutes. The fact that the minutes of this meeting were not made publicly available until after the next meeting had already taken place has left interested parties wondering how committed the department is to providing them with an opportunity to have their say.

Given that the document only runs to a meagre 1,225 words and contains less information about the workings of the forum than ever before, there are those who are concerned that the forum’s ability to engage with interested parties is severely limited by the latest changes. More cynical commentators have suggested that the demise in the Forum’s efficacy is fitting considering the increasing issues surrounding the legislation itself.

One of the worrying aspects of the forum’s operation is that some of the issues being discussed have reached something of an impasse from which the members seem unable to escape. The question of how to improve awareness of IR35 has reached the conclusion that it is the duty of HMRC to ensure taxpayers know their responsibilities, but recognise that contractors are unlikely to turn to the department to offer advice on whether they should be paying more tax.

If you are confused about the application of IR35 and whether it applies to you, then our guide to IR35 is a comprehensive guide to the legislation. For any other issues surrounding contractor tax, our handy guides provide plenty of information and our friendly and experienced team are always on hand to help you. Give us a call today on 01442 275789 or email: newbusiness@sjdaccountancy.com for more information.

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