HMRC relieves concerns for Contractors

In April 2020, IR35 rules will be extended to cover the private sector as well as the public sector, as it does currently. There was significant concern amongst contractors that if they changed their status in April, HMRC could open a retrospective enquiry.

HMRC have stated that they will only open investigations if it has reasons to suspect fraudulent or criminal activity. This should reduce concerns amongst private sector contractors.

Jon Stride, of the Association of Accounting Technicians (AAT) has welcomed the announcement.

‘This is a high bar to clear and builds on earlier statements [from HMRC] that the reforms are not intended to be retrospective. Contractors were concerned that recognition of a different status from April 2020 could give HMRC grounds for seeking additional tax for earlier years. The risk of any such retrospective inquiry is substantially reduced by HMRC’s clarification.’

If you’re unsure about the impact of these rules to any contract, please get in touch. They are quite involved and it is important that every case be looked at, and no assumptions made.

Similarly, if you receive any communication from HMRC, as a client of ours, you will automatically be enrolled in our Fee Protection scheme, which covers our costs for any HMRC enquiry or investigation. There are no additional fees for membership, as we classify the peace of mind that comes with the membership as essential for all business owners and include it in our standard fees. If you receive any communication from HMRC, please forward it straight to us, or refer them to us should they call you.