HMRC release new IR35 guidance

Knowledge base from Boox

By Lynne Gowers on 23rd June 2014

HMRC release new IR35 guidance

For contractors and freelancers across the country, IR35 legislation is a constant topic of debate and discussion.

Many find the controversial tax regulation confusing and IR35 has recently been at the centre of a review from the Personal Service Companies (PSC) Committee.

In an attempt to clear up some of the confusion surrounding the legislation, HM Revenue and Customs (HMRC) has now replaced the FAQ section on its website with an up-to-date 19-page guide.

HMRC release new IR35 guidance

Designed in accordance with the IR35 Forum, this new piece of documentation is split into six sections and is designed to be much clearer and easier to digest than the previous resource.

The six categories are as follows:

  • IR35 Intermediaries Legislation
  • How to work out if IR35 affects you
  • How IR35 applies to you
  • IR35 deemed employment payment: how to calculate and pay
  • Contracts
  • Enquiries by HM Revenue and Customs

However, despite HMRC’s attempts to simplify things, it seems that some parts of the document may end up pushing contractors further out into the cold regarding IR35.

In the view of Contractor UK, the sub-section which relates to HMRC’s Contract Review is worded in such away that it suggests contractors may end up being investigated by the tax office in the event that they dispute a decision.

If you dispute an opinion from the IR35 Contract Review Service and the dispute can’t be resolved quickly, the papers will be passed to the local IR35 Inspector,… reads the message from HMRC.

This process will only occur at the request of the contractor and, although not a new revelation with regards to IR35, the wording used by the tax office may raise a few concerns among many independent workers who could be affected.

With the government’s recent reaction to the PSC Committee’s 16 tax recommendation widely criticised by many in the freelance community, one thing is for certain, the debate regarding IR35 and it’s role within the tax system is far from over.

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