HMRC is to review the tick-box approach to IR35 and the associated employment status issues but will it work this time, asks Howard Royse ACA, sole practitioner at Howard Royse Ltd
IAs most readers will know, IR35 was established in 1999 by then Chancellor Gordon Brown, for HMRC to use as a curb against employers and employees conspiring to avoid tax and national insurance, by the termination of an employment only for it to be replaced by the employee returning as a contractor working through a limited company – but doing exactly the same work under exactly the same circumstances.
Throughout its life, this tax rule has been the subject of much criticism, but considered a vital barrier against tax avoidance by HMRC. In the 2011 Budget, it was announced that IR35 would be retained but that a forum would be established to advise and monitor improvements in its administration, proposed and introduced by HMRC.
