HMRC U Turn – HMRC do a complete U Turn on IR35

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HMRC U Turn on IR35
HMRC U Turn on IR35

HMRC U Turn

We now have a complete HMRC U Turn on IR35 and its implementation.

When the Conservatives accepted the results of the IR35 Review Panel they set up that IR35 would be kept and a Forum would be set up to bring more clarity to it for contractors, we were led to believe that part of this clarity would be to look at a contractor‘s working practices as a whole across different contracts to see if he or she was caught rather than looking at it contract be contract.

IR35 Scenarios

Indeed in of the IR35 scenarios they have published they have one gut called ‘Costas‘ who was outside it for the first 3 years of a contract and inside for the last 4 years at the same place.

The only thing he was doing differently was that he was working on a particular project for the first three years and was assigned different tasks at by the client at the same company for the last 4 years.

HMRC View

Now HMRC are saying:-

1. Some businesses have all their engagements outside IR35.

2. Some businesses have all their engagements within it.

3. Some businesses have not only engagements outside it but also engagements within it.

4. Some businesses have engagements which start outside it but, because the working arrangements change, later on come within it.

5. Some businesses have engagements which start within it but, because the working arrangements change, later on come outside it.

Contractors Working Practices

That certainly doesn‘t sound as if they are going to look at contractors working practices over all their contracts to see if they are an IR35 contractor or not.

It looks like this is the same old same old where each individual contract is examined.

There‘s not much clarity being brought in here after this HMRC U Turn.

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