IR35 Investigations Results
Recent IR35 Investigations results show contractors winning 8 of the last 9 IR35 cases at tribunal.
HMRC have won only one of those recent cases.
This must have cost them lots of time and money – taxpayers money.
HMRC’s IR35 Trap is not working.
It is thought that this is the reasoning behind them dropping a case they have been pursuing against one of their own IT contractors for 3 years.
Garry Philpot GMPFive IR35 Case
Garry Philpot, through his limited company GMPFive Consulting, provided test management services to HMRC.
He got a letter from HMRC in 2015 saying that they were investigating him for IR35.
Following a teleconference between the inspector, three Revenue officials and Philpot, the inspector gave his verdict. Philpot is inside IR35 he said.
There was a right of Substitution in the contract.
However, HMRC said that they would never have triggered it.
Qdos Asks for Independent IR35 Review
Philpot and Qdos, who represent him, asked for an independent review.
HMRC said that Garry Philpot owed them £59,000.
In May 2018 the independent review upheld the original decision.
Philpot and Qdos lodged an appeal against this verdict.
They were awaiting HMRC’s statement of case when they got the news.
HMRC suddenly announced that they were closing the case.
IR35 Appeals from Contractors
IR35 appeals from contractors are currently swamping the tribunal system.
So, it seems that that HMRC are now going to be far more selective in their IR35 investigations and prosecutions.
They desperately need a win.
However, IR35 Investigations results are very much against them.
They may be now weeding out the cases where they think they stand the best chance of losing.
Good News for Contractors on IR35
So, this is good news for contractors.
These investigations take years out a contractors life even if they win their cases – which most contractors do.
Already contractors are more likely to be struck by lightning than investigated for IR35.
This means that fewer and fewer contractors are likely to be investigated in the future.
HMRC are already spending too much time and money prosecuting contractors who turn out to be outside IR35.
IR35 Investigations results don’t justify this.
For further news and advice on IR35 click on IR35 Tax.
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