HMRC criticised over IR35 implementation

HMRC needs to demonstrate that off-payroll working rules, commonly known as IR35, can operate effectively and fairly in the real world, according to a report by the Public Accounts Committee (PAC).

The tax authority should also investigate whether the costs and unintended consequences of IR35 are proportionate to the additional tax revenue that the reforms raise.

The PAC concluded that it is too difficult for workers to challenge incorrect status determinations.

It also said that HMRC is not doing enough to understand the impact of the reforms on workers and labour markets.

Dame Meg Hillier MP, Chair of the PAC, said:

'While workers in the gig economy have challenged their work and tax status in the courts, there is no recourse for workers deemed subject to IR35 tax rules despite the confusion and non-compliance that persist even in central government itself.

'After years of fiddling with these reforms and with central government spending hundreds of millions of pounds to cover tax for individuals wrongly assessed as self-employed, the fundamental problems underlying UK taxation of work remain.

'It is now up to HMRC to demonstrate that the system can work fairly in the real world; to prove that it is correctly claiming revenues under the system and that the additional revenues raised are worth the costs and unintended consequences in the labour market.'

Internet links: UK Parliament website

Home | Contact us | Site map | Accessibility | Help | Privacy |

© 2022 Wilson Sandford. All rights reserved.
Wilson Sandford Limited is registered in England & Wales.


Registered Office: Wilson Sandford, 85 Church Road, Hove, East Sussex BN3 2BB

In accordance with the disclosure requirements of the Provision of Services Regulations 2009, our professional indemnity insurers are Certain Underwriters at Lloyd’s & Allianz Global Corporate & Specialty SE of 30 Fenchurch Avenue, London, England, EC3M 5AD. The territorial coverage is worldwide excluding professional business carried out from an office in the United States of America or Canada and excludes any action for a claim brought in any court in the United States of America or Canada.