Key Points from the meeting minutes:
- Draft guidance should be written to reassure those who are clearly \’outside the ambit\’ of IR35, that they need not worry about IR35 compliance.
- The move to specialist IR35 teams should improve the likelihood of inconsistency when selecting compliance targets.
- The Forum will consider creating a \’Gateway Test\’ to help individuals determine their position under IR35, however there are numerous difficulties in creating one uniform test to suit all parties.
- HMRC addressed concerns over whether use of the currently IR35 helpline would in itself make an individual a target for a formal review. HMRC say that cases were only taken on the basis of risk assessment alone
- Rather than making random checks as is commonly perceived, HMRC uses risk assessment to decide with IR35 cases to review. Although unwilling to disclose their risk criteria, HMRC agreed that there was a need to be more transparent about the process of identifying potential IR35 targets.
- Attendees expressed their concern over \”customer segmentation\”, e.g. that the current approach does not recognise the difference between \’professional contractors\’ and \’temporary workers\’ in the labour market. HMRC agreed to look at how the current segmentation model could be expanded.
Kate Cottrell of Bauer & Cottrell said that \”As the minutes show we covered a lot of ground at the inaugural meeting and there is still a lot more work to do. I felt the general mood for making improvements to the way IR35 is administered was very positive and the Forum presents a real opportunity to get some clear guidance for everyone. For the first time since IR35 began we have a central point for contact with HMRC, who have the appetite and the power to ensure consistent treatment and processes for dealing with IR35 across the country. Providing we can iron out the detail for customer segmentation, those potentially affected by IR35 will be able to establish their level of risk of IR35 investigation.”
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