IR35 in the News

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CEST Tool Inside IR35 Bias?

published on Monday, May 13th, 2019

HMRC’s Check Employment Status for Tax (CEST) tool, is meant to evaluate an individual’s employment status on a set of criteria of which Mutuality of Obligation (MOO) is a key one. Mark Frampton, HMRC’s IR35 Policy Advisor, has been quoted saying about MOO that: “It would rarely, if ever be the case in public sector […]

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Filed under: CEST, IR35 News

HMRC Treating Taxpayers Fairly?

published on Thursday, March 7th, 2019

In December 2018 the Economic Affairs Committee on behalf of the House of Lords released a paper looking at the powers of HMRC. This paper had a particular focus on the case of loan charges (See HMRC’s policy paper). The commitee reviewed input from a wide range of stakeholders with “a great many written submissions […]

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Filed under: IR35 News

Whatever Happened to the Business Entity Tests?

published on Thursday, February 21st, 2019

Prior to Check Employment Status for Tax (CEST), HMRC stood by the results of Business Entity Tests. Effective April 2015 the tests were abolished by HMRC although they did say that they would stand by the results for three years. What were these tests? The Business Entity Tests essentially established whether a company was truly […]

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Filed under: IR35 News

Contractors Getting Employment Rights

published on Monday, February 4th, 2019

Private Sector companies are increasingly having to treat contractors more inline with permanent employees. There are an increasing number of cases going against the companies. At the end of 2016, Uber lost a legal bid to show that their drivers were independent contractors and this was recently confirmed on appeal. Two drivers demonstrated that they […]

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Filed under: IR35 News, Private Sector

Number of Freelancers in the UK

published on Thursday, January 17th, 2019

According to the government’s figures there are 1.9 million Freelancers in the UK. This compares to just 1.4 million in 2014 in the data published by the small business research centre in Kingston University; as reported here. This represents a 35.7% increase in just five years. This is an exceptional increase considering in the previous […]

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Filed under: IR35 News

CEST Criticised by Judiciary

published on Monday, May 13th, 2019

HMRC’s Check Employment Status for Tax (CEST) tool fails to look at the bigger picture. It’s particularly interesting to measure it against the landmark case of Hall v Lorimer (1993); where Lord Justice Nolan states: “In order to decide whether a person carries on business on his own account it is necessary to consider many […]

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Filed under: Case Law, CEST, IR35 News

HMRC Aggressively Pursuing Contractors About IR35

published on Monday, January 14th, 2019

HMRC appear to be increasing the pressure on contractors working through Personal Service Companies (PSCs) in the Public Sector; in relation to IR35. It’s only just over a year before IR35 is likely to apply to Medium/Large Private Sector companies. HMRC are aggressively pushing contractors to supply them with information concerning: Compliance of the rules […]

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Filed under: CEST, IR35 News

MPs Risk Losing Seats Over IR35

published on Tuesday, December 4th, 2018

According to some recent analysis, the contractor vote could have a significant impact on any forthcoming election. Comparing Office for National Statistics data showing the number of contractors in each constituency, the margins by which the current MP gained office, and survey results showing that 49% of contractors would change their voting intentions away from the incumbent […]

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Filed under: IR35 News

Government Departments Encourage IR35 Tax Hike

published on Wednesday, November 28th, 2018

UK Government Departments have encouraged contractors to increase their rates amid serious concerns about the ability to hold on to the 18,000 Digital Contractors in Central Government. HMRC believes that only 10% of the existing 20000 Public Sector Contractors are legitimately declaring themselves Outside IR35. A recent survey showed that only 10% of existing Public […]

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Filed under: IR35 News

Companies Engaging Contractors Urged to Prepare for Incoming Tax Reform

published on Friday, November 9th, 2018

Private sector companies are being encouraged to proactively prepare for the IR35 changes scheduled for April 2020. The Private Sector has an opportunity to learn from the mistakes made by Public Sector organisations when the changes were rolled out in April 2017. IR35 Compliance have a range of services that will assist companies with this […]

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Filed under: IR35 News, Private Sector

Why Freelancers Will Fuel UK Businesses In The Post-Brexit Economy

published on Thursday, November 8th, 2018

There is major concern within the Tech Industry that the shortage of ‘home-grown’ talent in the software sector will materially affect UK Companies’ ability to meet demand and innovate post-Brexit. The UK government assure industry that they are taking this seriously and the most likely course of action will be to allow Freelancers into the […]

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Filed under: IR35 News

Retrospective IR35 Inspections

published on Wednesday, November 7th, 2018

Contractors being placed Inside IR35 at the BBC have been investigated by HMRC for claiming to be Outside IR35, prior to April 2017. The Independent Professionals & Self-Employed organisation are recommending that contractors do not just automatically renew their existing contracts because HMRC are conducting checks of employer records and then using the information gained […]

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Filed under: IR35 News

Contractors Refuse Inside IR35

published on Sunday, November 4th, 2018

In response to the MoD issuing letters demanding that contractors join PAYE or leave, 30 people are reported to have left contract roles at the UK Hydrographic Office. Previously, contractors could expect a contract review by the end client. However, the change in policy effectively enforces an Inside IR35 status by applying a blanket policy. […]

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Filed under: IR35 News

Private Sector Off-Payroll Expected to Net £3bn

published on Friday, November 2nd, 2018

HMRC expects to net £3bn from the roll out of the IR35 changes to the Private Sector between April 2020 and March 2025. Interestingly, this article suggests that the contractors will pick-up the bill. This is contrary to our experience in the Public Sector where Public bodies reported that it became much harder to recruit […]

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Filed under: IR35 News, Private Sector

Judge Rejects CEST Assessment

published on Wednesday, October 17th, 2018

Bad news for those adopting a blanket policy for Inside IR35 determinations based on the Check Employment Status for Tax (CEST) tool. A judge has ruled that a contractor was not employed, as the CEST tool indicated, and that tax and National Insurance contributions deducted at source must be returned to the contractor. The judge […]

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Filed under: CEST, IR35 News

HMRC Tax Inspector Criticises CEST Tool

published on Friday, August 10th, 2018

Even HMRC Tax Inspectors are criticising the use of Check Employment Status for Tax tool (CEST) for determining IR35 status. A key component to the changes to the Finance Act, introducing the IR35 changes, moves responsibility for tax due from the fee payer to the client; where reasonable care is not taken. There are a […]

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Filed under: CEST, IR35 News

CEST Contradicts Blanket Inside IR35 Determinations

published on Friday, June 1st, 2018

According to HMRC’s own figures, released under a Freedom Of Information (FOI) request, 54% of completed CEST reports have given an Outside IR35 Determination. This goes against the blanket Inside IR35 Assessments given by some Public Sector Bodies; including the NHS & MoD. These results could lead to contractors making a claim against these Public […]

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Filed under: CEST, IR35 News

Government Body Withdraws Blanket IR35 Policy

published on Friday, June 1st, 2018

The NHS seems to be reacting to the pressure caused by mass contractor walkouts in response to the blanket Inside IR35 policy. The NHS have been pushing the policy since the change in legislation making Public Sector bodies responsible for IR35 determination. However, NHS Improvement has now agreed that these determinations were not accurate and they […]

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Filed under: IR35 News

IR35 Extension to Private Sector to Increase Contractor Rates

published on Saturday, April 21st, 2018

HMRC believe that 90% on contractors incorrectly specify themselves as Outside IR35, arguing the balance should be Inside IR35. There has been a 250% increase in the number of contractors caught by the change in legislation that have increased their rates. Nearly half of the Freelancers in a recent study have left the Public Sector […]

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Filed under: IR35 News, Private Sector

Select Committee Told BBC Coerced Staff into Cheating IR35 Rules

published on Thursday, March 22nd, 2018

A number of BBC presenters and staff have stated to a Parliamentary Commons Select Committee for Digital, Culture, Media & Sport that they were coerced into forming Personal Service Companies (PSCs) to side-step employment regulations. In a number of cases the staff claimed that they were unaware of changes in regulations and trusted the BBC […]

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Filed under: IR35 News