Fourth specialist IR35 team deployed by HMRC

Many of our clients here at Sherwin Currid (http://www.sherwincurrid.com) initially approach our accountants in Surrey for advice on IR35. Such people may be intrigued to read that HM Revenue & Customs is now deploying a fourth crack unit of officers charged specifically with investigating freelancers and contractors working under the legislation.

It was confirmed at the last IR35 Forum Meeting on April 29th that HMRC would not only be updating the aim of its existing specialist teams based in Croydon, Edinburgh and Manchester, but would also be adding a new team in Bradford. HMRC stated as its ultimate aim the "normalisation" of the approach taken by the four teams, so that investigations into IR35 could be carried out by non-specialist officers on the basis of its not being the sole or main risk, with advice being provided by specialists as necessary.

The addition of the new team could possibly be attributed to extra resources simply being needed in the light of an increase in investigations. The move appeared to be supported by forum members, who said that they would be "disappointed" in the event of IR35's removal from the dedicated units. For those clients of our tax accountants in Surrey who are unaware, the Forum was established after the 2011 Budget, when the Government announced its commitment to making clear improvements to the administration of IR35. Its members include both taxpayer representatives and professional advisors.

Although the Revenue was asked at the meeting to provide details on the precise number of investigations and other "IR35 statistics", it declined to do so, citing an intention to publish such data on the basis of a set timetable "in the future". However, there have been suggestions by industry observers that even the existing three teams could handle as many as 1,000 IR35 investigations in each tax year. HMRC did at least concede, on the subject of the teams' capacity, that there was a "finite amount" of work that they were capable of handling. This could be partly attributable to the request made to its non-specialist tax officers to "channel cases involving IR35 to the specialist teams."

Supporting the implication that there will be more IR35 investigations in future into many of those using an accountant in Surrey, it was also confirmed that there had been a significant rise in the number of customer enquiries into HMRC's Contract Review service. The department added that it had reviewed 94 contracts and was able to give a response in 89 of them. However, of those, it was "unable to give an opinion" for IR35 purposes in 79 of them. The Revenue said that an evaluation into the Contract Review service would take place in the summer.

Nonetheless, such a high number of "unable to give an opinion" outcomes is likely to concern many of those using a tax accountant in Surrey from Sherwin Currid (http://www.sherwincurrid.com), and indeed, may simply confirm the continued considerable usefulness of our own fixed fee IR35 review service.

Editor’s Note: Sherwin Currid (http://www.sherwincurrid.com) are represented by the search engine advertising and digital marketing specialists Jumping Spider Media. Email: info@jumpingspidermedia.co.uk or call: +44 (0)20 3070 1959 / +34 952 783 637.