HMRC Contractor IR35 Campaign – Pay Up Letters Sent

IR35 Investigations results
IR35 Investigations results

HMRC Contractor IR35 Campaign

The latest HMRC contractor IR35 campaign is targeting specific groups of contractors demanding they pay IR35 tax and national insurance. They also want back tax. HMRC have sent out a load of letters to BBC presenters saying that they are really employees of the BBC and not freelancers. So, they want them to pay the resulting tax and national insurance. These BBC presenters had been operating as freelancers with limited companies.

This is despite HMRC losing the Lorraine Kelly case and the Kaye Adams case at tax tribunals.

BBC Presenters Targeted for IR35 Tax

So what is causing this sudden targeting of BBC presenters?

Well, presenters like Jeremy Paxman have accused the BBC of insisting that presenters operate via limited companies. So, the BBC have said that they will make sure that any presenter who was freelance and is now classified as an employee by HMRC will not lose out financially.

HMRC are demanding that those presenters that they claim are inside IR35 pay back tax for the past 6 years. Knowing that the BBC have made that financial promise, HMRC are trying to get as many BBC presenters as possible to be reclassified as BBC employees (for tax purposes only). They want the money from their limited companies.

New Tactic in HMRC Contractor IR35 Campaign

This appear to be a new tactic by HMRC where they target a specific group of freelancers like this. They act as judge and jury both accusing them of operating outside IR35 when they were really inside it and finding them guilty of it at the same time.

Rather than HMRC having to prove that a freelancer is inside IR35 when they have been operating outside of it HMRC are making the assumption that all members of a specific group, i.e. BBC presenters are inside IR35. The onus is now on the freelancers to prove that they are not inside IR35.

It’s like a court saying at the beginning of a trial, we have found you guilty. Now you will have to prove that you are not. They will now be guilty until they can prove their innocence.

BBC Presenters Must Admit Inside IR35

The BBC will only underwrite their presenters tax hit if the presenter accepts that they were really inside IR35 for the past few years. If they don’t, and they don’t have IR35 insurance, the presenters will have to bear their own cost of taking on HMRC.

If the freelance BBC presenter fights and loses the case they are liable for the back tax, penalties and interest themselves.

Although this only applies to BBC presenters, HMRC are already targeting a number of other TV presenters.

HMRC Contractor IR35 Campaign May Target IT Contractors

Of course, if this tactic is successful no one would put it past HMRC targeting other sectors of the freelance industry like IT Contractors in this way.

There could potentially be a massive tax take if HMRC wrote to a whole load of IT Contractors, perhaps starting at the BBC, telling them that they have been adjudged to be inside IR35 and asking them to pay up or prove that they are not.

Contractors Without IR35 Insurance

There would be large numbers of IT Contractors who don’t have IR35 insurance who would maybe capitulate, or cut a deal, rather than take on HMRC over an extended period of time.

The way HMRC have been acting recently has caused concern both in the House of Commons and the House of Lords. This HMRC contractor IR35 campaign is something that they should maybe look at too.

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