HM Revenue And Customs Is Calling On Contractors For Advice

Why is it that there’s so much suspicion when it comes to any type of interaction between the government and the people? This is a question that’s being asked on both sides of the equation as HM Revenue and Customs initiates a programme to gather feedback from contractors.

Contractors may – or indeed may not – be aware of new regulations that were released by the government in 2012, coded IR 35. The government wants to know if contractors are confused, unaware, or can suggest how to refine these regulations for the greater good.

Payrize lauds any effort by the government to clarify any legislation and to offer contractors a way to contribute. It’s good to see a framework paper circulated by the government to those who may be impacted by the reach of IR 35. We’ve heard that the new rules could be more user-friendly, in particular when it comes to the Business Entity Tests, a strategy to help determine what the “real” tax status of a contractor truly is.

The government may be highlighting the fact that there’s a certain amount of wariness on behalf of the contractor when it comes to communicating with the government directly. Perhaps this is why the “contract review service” that was part of the IR 35 reform hasn’t seen more action. As part of this contract review system contractors may call a tax inspector and ask for advice in relation to their particular situation and contract detail. Even though the government maintains that this will not lead to the risk of a compliance review, very few people have taken up the offer in its first months.

The government is being clear. The regulators want contractors to make more use of the helpline that has been set up to help them clarify their individual contracts. They also want more uptake when it comes to the business entity tests, a particular test designed to help the contractor determine how likely they may be to become involved in an IR 35 investigation over their tax affairs in the future.

Payrize agrees that more clarity is called for. We also suggest that the government needs to advertise and promote the existence of not only the help lines and entity tests, but also the actual existence of the IR 35 legislation in the first place. Many contractors are confused and said confusion can often lead to a potential failure to comply.

About Payrize

Payrize is a tax solution comparison tool for contractors and freelancers. The aim of the company is to provide extensive resources enabling the client to locate the best tax solution, as well as to source the best opportunities and contracting jobs at a variety of companies around the world.

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Dale Friday

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VMF Ltd

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