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

Minister refuses to reveal IR35 investigation figures

Published on Jul 22, 2009 |

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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.