National IR35 Compliance Coordinator
HMRC are about to hire a new national IR35 compliance coordinator.
The Chancellor, in his last Budget, announced that he would be beefing up the IR35 Compliance team with more Compliance Officers.
This is just about the only area of Government where staff numbers are to be increased whilst savage cuts are taking place elsewhere.
They said also that they would be strengthening IR35.
It looks like they believe this is an area where they can make some money.
Contractors appear to be soft targets when the Government is looking for more tax income.
New HMRC Appointment
They have announced that they will be seeking a National IR35 Compliance Coordinator.
I‘m sure that his or her brief will not be to collect less IR35 tax.
They will also be setting up a Business Educational Support Unit for both Employer Education and Contractor Education.
One is immediately suspicious of all of this.
Interests of HMRC
It is not in the interests of HMRC to tell heaps of contractors that they are outside IR35.
It’s certainly not in their interests to ‘educate‘ contractors on how to avoid IR35 or put themselves outside of it.
After all, the reason they gave for using only 6 of the 14 questions they agreed with the other members of the IR35 Forum was that if they include the others it would ‘educate‘ contractors on how to change their contracts and way of working to put themselves outside of IR35.
Also, the PCG are up in arms. That’s because HMRC have decided the weighting factor for the questions unilaterally. The PCG reckon that the online questionnaire to be published shortly would show most limited company contractors to be at high or medium risk of being caught by IR35.
As IR35 is a vague law anyway you would expect HMRC to exploit that vagueness. They would want to frighten contractors out of Limited Companies and into Umbrella Companies.
When all this ‘strengthening of IR35‘ is done and all the extra Compliance Officers put in place, including a National IR35 Compliance coordinator, it will be interesting to see how many contractors will be in Umbrella Companies as opposed to Limited Companies.
I‘m willing to bet that there the percentage of contractors inside Umbrella Companies will increase considerably.
I bet the PCG didn‘t expect, when they rushed out that Press Release during the last campaign. It proclaimed that they had got a promise out of the Conservatives that they would ‘look at‘ IR35 again, that the Conservatives would decide to keep IR35. Furthermore, they have promised to strengthen it and then take on extra Compliance Officers.
Hiring a new national IR35 compliance coordinator is just the first step.