{"id":138,"date":"2011-11-16T22:29:39","date_gmt":"2011-11-16T22:29:39","guid":{"rendered":"https:\/\/david-kirk.co.uk\/?p=138"},"modified":"2019-08-12T10:56:07","modified_gmt":"2019-08-12T10:56:07","slug":"ir35","status":"publish","type":"post","link":"https:\/\/david-kirk.co.uk\/?p=138","title":{"rendered":"IR35"},"content":{"rendered":"

Congratulations to the Professional Contractors Group, who have wheedled out of the Government some interesting statistics on just how ineffective the IR35 legislation is.\u00a0 In the 2010\/11 tax year HMRC opened only 23 investigations into whether IR35 should be operated.\u00a0 This was up on 2009\/10 (12 investigations) but a considerable reduction on 2007\/08 (104) and earlier years.\u00a0 The tax yield from this has gone down too, from \u00a31.9 million in 2006\/07 to \u00a3219,000 last year.\u00a0 You can see the details at
\nhttp:\/\/www.pcg.org.uk\/cms\/index.php?option=com_content&view=article&id=8118:pcg-calls-for-action-in-light-of-ir35-tax-yield-figures-&catid=861:press-release-archive&Itemid=1361<\/a>.<\/p>\n

When put against the Government\u2019s total tax take and the number of freelance contractors operating through companies, these figures are insignificant.\u00a0 It makes one wonder what the \u2018deterrent effect\u2019 is that the Government says it sees in keeping the legislation on the
\nbooks.<\/p>\n

It also makes one wonder what is the point of the service company question, which appears on form P35 (the year end PAYE reporting form), and in the employment pages of individuals\u2019 tax returns.\u00a0 This was inserted into the tax return in 2008 when HMRC was under pressure from Parliament to \u2018do something\u2019 about the low yield from IR35 investigations, and it asks what salary and dividends the taxpayer has received from any service companies (not necessarily ones that ought to be operating IR35).<\/p>\n

Rest easy \u2013 HMRC is clearly not making much use of this information.\u00a0 It is quite probable that the question is ultra vires <\/em>anyway.\u00a0 Keith Gordon, a barrister at Atlas Chambers, reports in his blog(http:\/\/www.atlaschambers.com\/members\/KMG5.php<\/a>) on a lengthy correspondence that he had with the Revenue on this one, in which he seems to have very effectively tied them up in knots.\u00a0 This is definitely recommended reading if you want justification for opting out of answering the service company question.<\/p>\n

So David Kirk & Co. Ltd\u2019s policy is that we recommend to our clients that they do not answer the service company question, but do explain why they are not answering it, and we prepare tax returns on that basis unless you ask us not to.<\/p>\n","protected":false},"excerpt":{"rendered":"

Congratulations to the Professional Contractors Group, who have wheedled out of the Government some interesting statistics on just how ineffective the IR35 legislation is.\u00a0 In the 2010\/11 tax year HMRC opened only 23 investigations into whether IR35 should be operated.\u00a0 This was up on 2009\/10 (12 investigations) but a considerable reduction on 2007\/08 (104) and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6],"tags":[],"_links":{"self":[{"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/138"}],"collection":[{"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=138"}],"version-history":[{"count":13,"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/138\/revisions"}],"predecessor-version":[{"id":559,"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/138\/revisions\/559"}],"wp:attachment":[{"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/david-kirk.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}