Taxman's IR35 enquiry yield drops by 61%

[saptastic]

HMRC suffers 61% drop in IR35 enquiry yield in 2013-14 :: Contractor UK

This is interesting stats, I wonder how much it cost to generate the £430k.

Despite the high enquiries does it mean that companies are better at defending IR35? or just of little interest to HMRC relatively?

[TheFaQQer]

So an average of under £2.5k for each investigation

Well worth it.

[saptastic]

At a cost of way above £2.5k I imagine. I know this is small in the world of HMRC - but a strange world when the cost of raising tax is a tax burden. Surely the big wins should be focussed on the few such as Amazon, Starbucks etc that make so much money out of the UK.

[Pondlife]

Surely this is a win for us. HMRC finally realises that there are two types of contractors, those that know it's largely bollox and those that don't. Those that don't know will pay up and go Brolly - taxman happy with his share. Those that do know it's bollox and make provision (legal protection, insurance etc) - Taxman knows it's not worth chasing and focuses elsewhere.

[Maslins]

You'd think so, but I believe their attitude is that whilst IR35 isn't fit for purpose, saying it's scrapped could pave the way for loads of high paid execs leaving employment to become contractors.

Basically it's rubbish, but despite that it still scares some people, so worth keeping

[tractor]

...

At a cost of way above £2.5k I imagine. I know this is small in the world of HMRC - but a strange world when the cost of raising tax is a tax burden. Surely the big wins should be focussed on the few such as Amazon, Starbucks etc that make so much money out of the UK.

Low hanging fruit and all that.

HMRC allow the biggies to negotiate away their tax bill year after year because they know that if they don't, they will be tied up in court for decades for every single year in question. Their logic is that 10m in the hand is better than 10bn in the bush.

[Zero Liability]

Notice how the more the inquiries shoot up, the more the average yield collapses. Even in some years with low numbers it's paltry but it goes to show they have severely diminishing returns, and this isn't even going into the cost-efficiency for those cases they do win. Its only value to the government are their questionable deterrence figures. I suspect the cost efficiency for cases they do win is likewise horrendous, given the length of these cases and the fact that they have to prove their case before a tribunal.

[BolshieBastard]

HMRC suffers 61% drop in IR35 enquiry yield in 2013-14 :: Contractor UK

This is interesting stats, I wonder how much it cost to generate the £430k.

Despite the high enquiries does it mean that companies are better at defending IR35? or just of little interest to HMRC relatively?

hmrc will be along soon enough to say they missed a couple of noughts off that figure.

While it is interesting they suffered a massive drop, its the number of contractors they scare into IR35 \ umbrella's which isnt quantified. The number engaged via umbrella's must be serious numbers?

[Pondlife]

hmrc will be along soon enough to say they missed a couple of noughts off that figure.

While it is interesting they suffered a massive drop, its the number of contractors they scare into IR35 \ umbrella's which isnt quantified. The number engaged via umbrella's must be serious numbers?

It's not just the brollys they claim success for. It's all the high earning (genuine) employees that would go ltd if there was no deterrent. That's why they refer to 'savings in lost tax revenue' or some such rubbish.

[Zero Liability]

Would be interesting to see their cost efficiency in the event that the contractor is defended by a competent defence team, e.g. Qdos, and what their yields are in the number of cases where they won versus the costs incurred. The deterrence is the main benefit, and even for that there are very few reliable figures; those that they do produce seem to be torn apart by IR35 experts.