A sharper IR35 focus would benefit all, says REC

Clamping down on the few real instances of false self-employment should be at the heart of the taxman’s fresh approach to administering the IR35 rules, a member of the new forum on the legislation says.

Jeff Brooks, chair of the IT group at agency staff body REC, believes such a sharper focus “is in the interest of all sides” – contractor, agent, client and taxman – as it would be quicker and more effective.

“We have to find a way to focus the system on the rare cases of actual disguised employment,” he said last week, reflecting on the REC’s appointment to the state-run IR35 forum.

“And make sure that the vast majority of contractors who have done nothing wrong don’t have to worry about being subjected to a HMRC investigation or tribunal that could last years.”

Even in the eyes of officials at Her Majesty’s Treasury, HM Revenue & Customs’ “performance” does need to “improve considerably,” says contractor group PCG, another IR35 forum member.

“Tax experts, accountancy firms and small businesses accepted that HMRC had to raise their game in dealing with IR35 and tax in general,” the group added, following talks with the said-parties earlier this month.

It also cited agreement that the IR35 forum should be a “practical platform for improving how IR35 is implemented,” and spoke of having being “assured that far from being a ‘talking shop’… [it] will be a positive force for change.”