IR35

Government announces that the cost of abolishing IR35 would be £550m!

In its response to the House of Lords Report, HMRC announced that the cost of removing IR35 would be £550million in lost taxes to the Exchequer. As HMRC has created four specialist offices to deal with IR35 investigations, one would imagine that the intention is to police IR35 better in order to increase tax revenues.

However, it is not just enquiry activity that is of concern; the tens of thousands of freelancers in the public sector have to provide an independent assessment of their IR35 status.  Moreover,  any contractors caught by IR35 will no longer be able to claim Travel & Subsistence Relief on their home to client site travel, which will add a further tax burden.

How do you know whether IR35 applies to your engagements?  Is it the contract?  Is it the working arrangements?  Is it your business practices?

With often conflicting advice appearing everywhere, and everyone having an opinion on what constitutes being ‘outside’ of IR35; what should you be doing?

As far as we are concerned, the only true measure for understanding your IR35 status is to look at the contract you have signed and assess the working practices of each engagement to ensure that these reflect the contract terms.

Anova has therefore teamed up with IR35 specialists, Abbey Tax, to offer a comprehensive IR35 contract review service to clients, which provides an assessment of your contract AND working practices, so you know exactly where you stand.

The charge for the contract review service is £150 + VAT.  You will receive a full, written report with suggestions for improvements where appropriate, and the opportunity to discuss the report with one of Abbey Tax’s specialists.

Please contact us to receive your working practices questionnaire. Make sure you understand your IR35 status position before HMRC starts showing an interest!