The Truth about IR35 Investigations


Despite hearsay and rumours, HMRC have only opened 193 IR35 investigations between the dates of 1st April 2012 to the 9th of November, but despite far less being carried out than contractors originally feared, a clear increase is being seen regarding HMRC’s involvement with the IR35 legislation.

Based on information collected by ContractorCalculator via a Freedom of Information (FOI) request, it was revealed that out of the 193 cases, HMRC confirms that 34 have been closed due to ‘no IR35 liability’ arose and a further ‘159 enquiries remain open and continue to be investigated.’

Speaking to Seb Maley, Associate Director at Qdos Contractor and IR35 specialist, he comments on the recent information stating, ‘Although the figure of 193 new enquiries between April and November is not exactly startling, it is still a significant increase on previous years. I would expect this figure to continue to rise as HMRC’s specialist IR35 teams get to grips with their new task.’

Seb mentions here the new IR35 teams that were introduced earlier in the year and have been compiling information surrounding UK contractors since their implementation. Commenting further, Seb highlights his optimism of this, and talks about HMRC’s future objectives. ‘A major positive to take from these figures is that 34 cases have been closed down already, which backs up HMRC’s intention to ensure enquiries do not become as protracted as they have in the past.’

Thus far, HMRC admits that ‘no reviews have been closed where the customer accepts that they are liable to additional sums of tax under IR35.’ As Seb points out, HMRC is primarily tackling IR35 enquiries with a measured approach to its new administration regime, this in stark contrast to the previous fears of thousands of enquiry letters falling on the doorsteps of nervous contractors.

By:Sam Greenwell

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