IR35 HMRC Enquiries increase – are you at risk? Reply


Scaring amounts

On the 25th November 2013, the House of Lords Select Committee on Personal Service Companies met with Rowena Fletcher (Deputy Director with special responsibility for the Employment Status Team) and Robin Wythes (Team Leader of the Employment Status Team).

You can read the full minutes by clicking on this link http://www.parliament.uk/documents/lords-committees/Personal-Service-Companies/uc131125Ev1FletcherWythes.pdf

HMRC estimate there are 200,000 Personal Service Companies in the UK compared to their estimate in 1999 of 90,000. Interestingly, HMRC admit to employing 8 Occupational Phychologists through Personal Service Companies. The risk to the Exchequer is valued at £475 million and  despite the large increase in PSC’s this estimate hasn’t changed since the introduction of IR35 in 1999.

In 2012-13 opened 256 enquiries into cases believed to be high risk and the tax year 2013-14 112 cases were opened in the  first 6 months. In 2011-12 only 59 cases were opened.

Currently it is taking 28 weeks per enquiry which is faster than in previous years when it took between 110 and 140 weeks.

Currently only 5 cases under investigation which are expected to go to tribunal.

HMRC have 40 specialist staff working on IR35 Compliance, they had 1,200 calls in 2012-13 requesting advice and 80 detailed contract reviews were sought. If a contract review is carried out HMRC will issue a written certificate of opinion, the committee was assured that any contract review is totally confidential and not passed to the compliance team.

So are you happy that your PSC would be safe if HMRC carried out an enquiry?

steve@bicknells.net

 

 

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