Taxman's IR35 enquiry yield drops by 61%
In fact, new figures from HM Revenue & Customs show such a yield fell from £1.1m in 2012/13 to a paltry £430,000 in 2013/14. Enquiries are down too but less so, from 256 to 192.
The yield figures were released to Pamela Nash MP under the Freedom of Information (FoI) Act. They show that IR35 enquiries netted 61% less in the last tax year than in the previous one.
Such revenue from IR35 “compliance interventions” is at its lowest level for three years, during which time reforms were put in place to try to make the rule more effective.
David Gauke said: “In addition to the tax voluntarily paid through IR35, and the compliance revenue, the cost to the Exchequer of not having… IR35…would be around £520m a year.”
Also in his reply to the FoI request last week, the Treasury minister said that regional data such as that for Scotland (where Ms Nash is a Labour MP), was not “produced” by HMRC.
Meanwhile, the reasons why IR35’s enquiry yield is down by almost two-thirds, at a time when the number of enquiries has reduced by only a quarter, will be debated today at the IR35 Forum.
The Forum may not isolate its discussions to the 2013/14 tax year (in which new guidance on IR35 was unveiled by HMRC), and so it may look at the previous years and enquiry yields, listed below:
|Tax Year||No. of IR35 Enquiries||Yield|
|2000 - 2001||16||nil|
|2001 - 2002||261||nil|
|2002 - 2003||1,016||£946, 275|
|2003 - 2004||1,166||£1.9m|
|2004 - 2005||771||£1.4m|
|2005 - 2006||656||£2.3m|
|2006 - 2007||158||£1.9m|
|2007 - 2008||104||£1.7m|
|2008 - 2009||25||£1.4m|
|2009 - 2010||12||£155,502|
|2010 - 2011||23||£220,000|
|2011 - 2012||59||£1.2m|
|2012 - 2013||256||£1.1m|
|2013 - 2014||192||£430,000|