Inland Revenue denies IR35 clampdown

Adrian Marlowe, managing director of legal consultancy Lawspeed, has warned that the Revenue is actively targeting personal services companies in order to catch out those that are not correctly accounting for the tax.

Marlowe is urging contractors to get their tax house in order, or face potentially crippling consequences.

‘My money is on the fact that they’ll be targeting contractors,’ he said. ‘I know they have written to clients to get the names of contractors they use. IR35 is a very lucrative tax and it’s relatively easy for the Revenue to do.’

But a spokeswoman for the Revenue denied the claim. ‘People within IR35 are not treated any differently to any other tax payers. It’s about making sure the information on tax returns is correct. Compliance and checking procedures are based on the random nature of enquiries. We treat everybody fairly,’ she explained.

The deadline for lodging self-assessment returns and presenting finalised P35 and P14 figures is 31 January. But contractors who ignore IR35 could face a series of penalties including interest on tax that should have been paid, and penalties of up to 100% of the tax due.

The Professional Contractors Group is meanwhile calling on its members to put their money where their mouth is as it continues its fight against IR35.

The PCG has told its members that it needs at least £350,000 in cash and £350,000 in pledges to its website by this time next week to continue the Judicial Review.

But funding is likely to prove problematic as its 14,000-strong membership has failed to agree on the best way to proceed.

PCG press officer Susie Hughes said: ‘There’s a strong feeling among the membership that they want to continue the fight. But, whereas initially the focus was trying to stop IR35 going into the statute books, now there are a variety of views within the membership about the best way forward.

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