Following a recent discussion with HMRC, AUCAE are launching its second national contractor survey; this time on IR35. HMRC are planning on moving the responsibility of determination from contractors to the “engager” (as yet undefined) in a bid to improve compliance. HMRC believe that only 10% of contractors are working inside IR35 and they believe that this figure should be much higher.
The cost to the taxpayer is, they say, over £430m per year, we believe that most bonafide contractors are in business on their own account and we need your help to prove it. So we urge you to take 10 minutes to complete the survey so that we can provide documentary evidence to HMRC as part of our written response to the proposed changes.
Intermediaries Legislation (IR35):
Publication date: 17 July 2015
At the Budget the government announced that HMRC would start a dialogue with business on how to improve the effectiveness of the existing intermediaries legislation, commonly known as IR35. HMRC will engage with stakeholders over the next few months to explore options to make the legislation more effective in protecting the Exchequer and levelling the playing field between direct employees and those who work in a similar manner to direct employees but through their own limited companies. This document sets out a framework for those discussions and covers:
The rationale for change; Options to improve the effectiveness of the rules; and Next Steps Rational for Change Legislation was introduced in 2000 to tackle the avoidance of employment taxes by those who work through intermediaries, primarily their own company, often known as a Personal Service Company (PSC).
The government believes this is not working as effectively as it should be and non-compliance with the legislation is widespread. This is unfair as two people doing the same job, in the same way, can end up paying very different levels of tax depending on how they are engaged and this costs the Exchequer a significant amount each year. This cost will increase as the number of people working through PSCs continues to grow.
Click here to download the PDF discussion document.
AUCAE submit written response to the HMRC IR35 Discussion Document
First of all, we would like to thank all of the contractor’s who took the time to contribute to our online survey.
The survey was only live, following the request for data in the HMRC round table event, for a week, but we had over 80 responses.
All responses have been included within our written submission to HMRC. Please click on the icon below to download a copy of the written response to the HMRC Intermediaries Legislation (IR35) Discussion Document.
SURVEY NOW CLOSED… Click here to view the written response from AUCAE, including the contractor responses to the survey.