Reiterated warnings from HM Revenue and Customs are increasingly difficult to miss these days. But one HMRC matter in particular has maintained an unrelenting omnipresence since its introduction over a decade ago: the IR35 legislation.
From July 2010 when certain amendments were made to IR35, HMRC have progressively stepped up their concentration and activity in an attempt to win their battle against tax avoidance.
Tax avoidance measures are now expected to raise over £9 billion in the duration of the next 5 years. Enquiries tripled in the first half of the 2012/13 tax year, with a total of 256 investigations triggered in this period – that’s just over one every working day.
Andy Vessey, asserted that, “Over the last few months I have seen an increased number of IR35 enquiries being taken up where contractors have been providing their services to private sector clients.
“Previously HMRC appeared to be concentrating their efforts primarily in the public sector. Whilst they still continue to be interested in the public sector they are now casting their net further afield.
“Also, despite HMRC's promises of two years ago to close down enquiries promptly where they had sufficient & satisfactory evidence to do so, I am now seeing signs of HMRC slipping back into their bad old ways of prolonging enquiries unnecessarily. Certain Status Inspectors are now digging their heels in & their actions appear to be premeditated.”
IR35 insurance is one of the most logical and simplest ways in which an individual can ensure that they are comprehensively protected from the turmoil of the legislation, as well as securing early interventions in investigations and handling all correspondence throughout.