The Home Office has been handed a £33.5million IR35 bill by HMRC after a review of its off-payroll compliance process was found to be “careless”. The tax bill was revealed in the department’s recently published 2020-2021 annual report and accounts.
The document reveals that HMRC placed the Home Office under review in 2018 following its implementation of the change to the off-payroll rules in the public sector that came into effect in 2017.…
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It’s been reliably reported that HMRC have resumed IR35 enquiries that were put on hold because of the Covid-19 pandemic. In recent weeks, contractors who were being investigated pre-pandemic received letters from HMRC, asking if they were ready for the investigation to resume, and giving them chance to put forward any circumstances that would make this difficult.…
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One of the unforeseen consequences of forcing contractors out of their limited companies and onto the payroll is their fear of retrospective action from HMRC. While end-clients apparently assumed that contractors would have little choice but to comply with an inside IR35 status and non-negotiable terms, contractors’ mistrust of HMRC has thrown an additional spanner in the works of the off-payroll debacle.…
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HMRC has launched preliminary IR35 investigations into Transport for London (TfL). The public sector organisation was approached by HMRC, who asked for information about its limited company contractors.
There are fears that this is another fishing exercise that could result in an outcome similar to that of NHS Digital.…
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In the event of an IR35 enquiry, HMRC will ask to see copies of the written contract. Although it’s common practice for them to dispute paper contracts as ‘contrivances’, it’s crucial that contractors take steps to ensure that the information presented in their contracts is consistent.…
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There has been considerable debate over the introduction of off-payroll working rules in the public sector, which are also set to apply to the private sector by 2020. The changes place the responsibility for determining whether IR35 applies to a contract with the government organisation that is paying the contractor.…
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The Chancellor’s budget announced that off-payroll rules will hit the private sector in 2020. Amidst uncertainty over Brexit, there are widespread concerns that the reforms will damage business and weaken the economy at a critical time. ContractingWise takes an overview of the off-payroll developments to date.…
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Mutuality of Obligation or MoO is a feature of employment law that relates to contractual agreements. In the simplest sense, it refers to the obligation of an employer to provide work and pay for it, together with the obligation of the employee to personally do the work.…
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Following the invitation by HM Treasury to submit a Budget representation, the Institute of Chartered Accountants in England and Wales (ICAEW) have released their suggestions. In their submission, they state that there should be “no new tax policy initiatives” in the Autumn Budget.…
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In the event of an IR35 inquiry, HMRC will attempt to establish the true relationship between the contractor and the end client in order to determine employment status. As many contracts are generic, the investigating officer will often place more emphasis on what’s known as the ‘hypothetical contract,’ formed by the impressions they gather about the day-to-day working practices of the contractor while on a given assignment.…
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