IR35 Bounty Hunters
HMRC are to set up a team of 36 IR35 Bounty Hunters.
Previously IT Contractors had strength in numbers.
It was like those nature programmes where there are huge herds of buffalo or zebras and the lion pack grabs one, if any at all.
There is very little chance of you being the buffalo or zebra that they down.
Contractors Investigated for IR35
So, it was the same for IT Contractors.
Although, like the zebras and buffalos, they saw some of their members being downed, they realised that the odds were in their favour. So, they continued to operate out of Limited Companies.
There were 23 IR35 investigations last year.
When you consider that there are over a million freelancers in the UK, the chances of being caught out were small.
Strengthen IR35 Rules
Firstly the Government said they would keep IR35 despite nods and winks to the poor old PCG. They had rushed out a Press Release just before the election proclaiming that the Conservatives would ‘look at‘ IR35 again.
Anyone who thought that they really would abolish IR35 and hand £2bn a year back to people who get paid 2 grand a week on average when they are looking to make savage austerity cuts, must be naive in the extreme.
Then they said in the last Budget that they were going to strengthen IR35. They would appoint more Compliance Officers.
They obviously see this is a big way to increase the tax take as they are cutting savagely elsewhere.
HMRC Bounty Hunters
Now they are going to set up a team of 36 IR35 bounty hunters who will hunt down contractors. That’s the ones who they feel are inside IR35.
As the new IR35 Business Entity Tests shows that IR35 catches virtually all contractors according to HMRC‘s scoring system anyway, there will be plenty of targets.