TaxPersonal TaxContractors face IR35 investigations

Contractors face IR35 investigations

Contractors could find themselves under investigation, through their clients, as the Inland Revenue checks contracts to see if they fall within the terms of the now notorious IR35 tax regulation.

New information placed on the Revenue’s website reveals that if contractors want their contracts informally checked by the department, clients may be contacted as part of the process.

Anne Redston, a leading campaigner against IR35, warned contractors to take special care over their contracts and said tax advisers and accountants should make sure their ‘clients know what they are doing’.

The Professional Contractors Group, which won leave for a judicial review of IR35, said the new bulletin was more ‘of the usual Revenue propaganda’.

IR35 has been the subject of controversy since it came into force in April last year. It affects contractors working through service companies and is intended to ensure they pay a fair rate of tax, according to the government.

Contractors maintain they are unfairly penalised by the measure. A date of 13 March has been set in the High Court for a review of the legislation.

Links

Inland Revenue Tax Bulletin – Issue 51: Providing Services Through an Intermediary: – IR35 – What Happens next?

AccountancyAge.com IR35 resource centre

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