Minister refuses to reveal IR35 investigation figures

Contractor Tax Protection
Tax Liability Cover (TLC35) and
IR35 insurance from Qdos Consulting

Minister refuses to reveal IR35 investigation figures

Posted Jul 22, 2009

The subject of IR35 was raised again in the Commons last month, with a Government Minister refusing to reveal how many IR35 investigations were launched over the past five years.

Parliamentary question on IR35

Labour MP Terry Rooney asked the following question in the Commons on 15th June 2009:

"To ask the Chancellor of the Exchequer how many investigations concerning IR35 were launched in each of the last five years; and how many of them resulted in (a) prosecution, (b) an increase in tax due and (c) no further action."

To which Kitty Ussher (Treasury) replied:

"The intermediaries legislation, commonly known as 'IR35', was introduced with effect from 6 April 2000 to counter the avoidance of employed levels of tax and national insurance by individuals providing their services through intermediaries.

"Disclosure of HM Revenue and Customs' compliance data relating to the legislation would result in a risk of non- compliance with the legislation. Accordingly I am not able to provide the data requested."

This reply suggests to us that the Government figures are likely to show that the IR35 rules are rarely enforced in practice, and to admit as such might lead to more people not bothering to comply with the legislation at all.

"Unprecedented" refusal to answer

The Professional Contractors Group, which recently revealed that IR35 contributes a pitiful £1.5m to the Treasury each year, suggests that it is "unprecedented for a Minister of the Crown to refuse to answer a Parliamentary question because that answer would result in a risk of non-compliance with the legislation".

Freedom of Information

The contractors' organisation has lodged a further Freedom of Information request with HMRC, asking exactly the same question as Mr Rooney.

We look forward to reporting the results of the FOI request as soon as we have them.

Please scroll down for related articles

Contractor Services

Clarity - Chartered Accountants - Fixed Fee £95/month. No hidden extras.
Together we're stronger! - Join PCG, representing contractors
Professional Indemnity Insurance - Essential contractor PI cover
AccountsNet CA - PCG Accredited. Great Value @ £65pm - View Demo
inniAccounts - Online Accountants, 24x7 Access, Free Demo
Qdos - IR35 experts - Providers of low cost contractor insurance
Free Umbrella Company - Save over £1400 p.a. on fees with Springboard
Free IR35 & Tax Review - Call ICS on 0800 195 3750
K & B Accountancy Group - Fixed fee contractor accounting only £75pm
Parasol - the UK's favourite umbrella company
planIT Services - Umbrella, Ltd company, free formation & IR35 review
Cloud 9 Group - Umbrella Solutions only £9.95 per week
Key Directories: Contractor Accountants | Umbrella Companies
Financial Services: Income Protection | Contractor Mortgages | Pensions
More Services: Compare Business Insurance | Company Formation

Online IR35 test tool launched for contractors
Contractors can now access a free online employment status test which provides an IR35 status result in just ten minutes.

IR35 irony as HMRC's ex-IT boss becomes short term contractor
The Sunday Times has revealed that HMRC's IT chief left his permanent role in June 2009, only to return as a contractor via his own limited company for the following three months.

Concerns raised over Telegraph IR35 abolition comment
With speculation rife about the future of IR35, a leading accountancy site has raised doubts over a newspaper claim that the coalition has promised to "abolish" the legislation.

Contractors' group asks - is this the end of IR35?
PCG, the leading contractors' organisation, says that it welcomes "the clearest statement yet from the Coalition Government that IR35 is to be abolished."

IR35 and the Emergency Budget
In the Emergency Budget, George Osborne confirmed the coalition's pledge to review IR35 as part of a wider review of the way small businesses are taxed in general.

Should contractors curb their enthusiasm over the coalition's pledge to review IR35?
Given the news that the coalition plans to review IR35, could a simpler tax system actually be more restrictive to the self employed?

Analysis of the Novasoft IR35 tribunal victory
Analysis of the recent Novasoft Limited IR35 tribunal, in which a contractor beat HMRC against all odds.

Contracting industry reaction to IR35 review plans
The contracting industry has reacted with both joy and caution at the news that the new coalition government has announced its intention to review IR35.

New government confirms plans to review IR35 rules
The new coalition government has released a more comprehensive document outlining its programme for governing over the coming 5 years - including its approach to IR35.

Will the new coalition government abolish IR35 rules?
Many contractors will be wondering how the new coalition government will act on IR35 over the coming months and years.

Contractor successful at IR35 appeal after five year wait
IT contractor, Novak Brajkovic, has won his appeal against an IR35 claim, which was initially triggered via his use of HMRC's own contract enquiry service!

IR35 rules - a guide for IT contractors
A brief guide to the controversial IR35 tax rules, how it affects IT contractors, and how to be IR35 compliant.

Conservatives would review IR35 rules following election win
As part of their pledge to review small business taxation should they win the general election, the Tories have singled out reform of the IR35 rules as a priority.

IR35 factors and the importance of 'control'
A brief overview of how 'control' is an important factor in determining the IR35 status of a contract.

IR35 and the Right of Substitution
The Right of Substitution is an important factor in IR35 / employment status cases, but how can it be used in reality? Why a RoS clause is useless unless it reflects the reality of the contractor's working practices.

IR35 Factors, IR35 Compliance, are you caught?