IR35 victory over Talksport presenter ‘inspired government to stick to its IR35 reform guns’
Speaking yesterday, status expert Kate Cottrell said the UT siding with HMRC and its stance on MoO “would have at least strengthened their resolve to press ahead with the reform.”
A former tax inspector, Cottrell pointed out that the verdict in HMRC’s favour would have been known to the government when lobbying for it to U-turn the IR35 changes was at fever pitch.
'May well explain the government's approach'
In line with her assessment, the UT ruling against Paul Hawksbee was published on July 28 -- a week after the government put out a strangely small reply to a large IR35 inquiry by peers.
Also when the government potentially already knew the UT had backed its MoO stance (a stance which CEST relies on), both No 10 and No 11 pressed MPs to back the IR35 changes.
“HMRC and HM Treasury would have been aware of the Kickabout Productions result some time ago,” said the co-founder of Bauer & Cottrell, in a statement to ContractorUK.
“That may well explain their approach recently – i.e. ‘we will not be changing anything or delaying the off-payroll rules.’”
The adviser was speaking after another IR35 expert expressed surprise at recruiters and end-hirers taking the view that Check Employment Status for Tax is the safest bet.
“Aside from the fact that CEST has been overruled in an IR35 court case when it was described as ‘irrelevant’ by HMRC,” began the expert, Nicole Slowey of status firm Qdos.
“Using CEST won’t protect you from an IR35 investigation even if it is the taxman’s very own tool. Cast your mind back to last year. The NHS was handed a £4.3million tax bill for inaccurate IR35 determinations made using CEST, just going to show that HMRC will by no means stand by assessment delivered by its own technology.”
In an online post and seeming to refer to it not testing for Mutuality, Slowey added: “When also taking into account the tool’s many other flaws, businesses shouldn’t rely on it.”