HMRC IR35 Test for Employment Status Angers Freelancers / Contractors

IR35 Test for Employment Status
IR35 Test for Employment Status

IR35 Test for Employment Status

HMRC’s IR35 Test for Employment Status comes in for considerable criticism today from BBC freelancers in today’s Times.

The Times are running yet another anti-freelancer article on its front page.

The Times was the newspaper which kicked up a stink in 1999 about ‘disguised employees’ which caused IR35 to be set up in the first place.

BBC Freelancers

Today it is having a go at BBC freelancers who it says earn hundreds of thousands of pounds and who cost HMRC millions through their use of personal service companies rater than being taxed as employees.

Because of previous Times articles about the BBC’s use of freelancers the BBC has forced freelancers to sit HMRC’s Check Employment Status for Tax online IR35 test (CEST).

If they don’t pass this test the BBC is forcing them to be taxed as employees.

HMRC Test Has No Basis in Law

However, HMRC’s IR35 test has no basis in law.

It is not a definitive test of a freelancer’s employment status.

It is only HMRC’s opinion as to who is inside IR35 and who is outside it.

And you have to say that HMRC have a vested interest here.

They should have recused themselves here and got an independent body, who understands IR35, to create this test.

Freelancers Fail IR35 Test

Almost half of those freelancers previously operating via personal service companies have either failed the test or have had an indeterminate result.

The latter would come to the same as failing the IR35 test as employers would not take the risk on them.

Now BBC presenters and other freelancers at the BBC are up in arms about being forced to become effectively employees after sitting this test.

They claim that the employment status test is unfit for the media.

Indeed, one could argue that it is unfit for anyone.

No Mutuality of Obligation

They don’t even have one of the three main IR35 Factors, Mutuality of Obligation, in the test.

They claim that there is automatic Mutuality of Obligation in the public sector.

However, a judge in the Mr Wells case a few weeks ago has blown a hole in that.

She found, in here judgment that as the employer had no obligation to pay the contractor after the end of his contract, there was no Mutuality of Obligation.

That would apply both in the private sector and the public sector.

BBC Presenters to Challenge Decision

It seems that some of the BBC’s freelance presenters are looking to have this change overturned at the BBC.

It would be likely that at least some of those who were found inside IR35 by HMRC’s employment status test would be found outside IR35 by a judge.

It’s about time that someone fought back against this unfair HMRC IR35 test.

It would be very good if someone challenged HMRC’s IR35 test for employment status in court.

That would put the cat among the pigeons.

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