Freelance contractors across the UK may welcome news that the body set up to improve HMRC’s handling of IR35 regulations is finally getting its teeth stuck into some real reforms.
Minutes of September’s IR35 Forum meeting reveal that HMRC has undertaken to improve four major areas of IR35 administration and wants detailed advice on how to improve its IR35 investigations, status reviews, IR35 helpline and contractor guidance.
Together, these processes lie at the heart of the reform project. Non-HMRC members of the Forum have been asked by Revenue representatives to consult their colleagues for detailed advice on each of these issues, a request which suggests that HMRC feels it has not received adequate information from its own sources thus far.
HMRC declined to share the details of its risk-profiling procedures with the Forum but has nonetheless agreed to share information about its broad risk assessment. Reading between the lines, the Forum would have preferred the former (the devil, after all, lies in the detail) but the concession can at least be seen as a step in a more helpful direction.
In addition, HMRC has agreed to draft 12 different scenarios that freelancers might find themselves in, each based on real-life events. The aim is to clearly identify scenarios that can be categorised as agreement between a contractor and HMRC, disagreement or uncertainty. At the next meeting of the Forum, which is scheduled for 9th November, non-HMRC forum members will present their evaluations of these scenarios.
Plans are also underway to create an IR35 National Compliance Unit and a Business Educational Support Unit to supply contractors and clients with guidance on IR35.