HMRC works with the IR35 Forum to improve the way in which IR35 is administered.
The IR35 Forum is a group of external stakeholders who meet regularly with HM Revenue and Customs (HMRC). It was established following the government’s commitment at Budget 2011 to make clear improvements to the way IR35 is administered. This followed the publication of the Office of Tax Simplification’s review of Small Business Tax.
The members of the IR35 Forum include taxpayer representatives and professional advisers with expert knowledge and experience of how the legislation operates in practice and how it affects key taxpayer groups. The IR35 Forum meets quarterly.
|Association of Chartered Certified Accountants|
|Association of Independent Professionals and the Self-Employed|
|Association of Professional Staffing Companies|
|Chartered Institute of Payroll Professionals|
|Chartered Institute of Taxation|
|Confederation of British Industry|
|Freelancer & Contractor Services Association|
|Institute of Chartered Accountants in England and Wales|
|Institute of Chartered Accountants of Scotland|
|Institute of Directors|
|Recruitment and Employment Confederation|
Terms of reference
To advise on the administration of IR35 policy in practice, assisting HMRC by acting as a consultative body to:
- provide HMRC with insights on the effectiveness of administration of IR35 on the ground
- identify and discuss specific areas for improvement in the administration of IR35
- explore the implications of potential changes to policies, products and processes relating to IR35
- help HMRC to communicate key messages to the members of organisations represented on the forum and a wider audience about IR35, and to ensure that guidance and information is clear and accessible for customers
Meetings should be constructive, open and professional. It will be made clear when items to be discussed are confidential and not for wider discussion.
The forum will nominate one external member to attend the Employment and Payroll Group as its representative.
The forum will be conducted in line with the published principles for the Employment and Payroll Group as set out in its terms of reference.
Minutes are published quarterly.
Minutes from previous years are available on The National Archives website:
IR35 Adminstrative Burden
The IR35 Adminstrative Burden report provides:
- a single note on the estimate of the cost to the Exchequer of abolishing IR35
- an updated administrative impact assessment note setting out the current administrative costs which taxpayers incur in dealing with IR35
The report has been published in response to a recommendation from the House of Lords Select Committee on Personal Service Companies in 2014.
IR35 administration review
In April 2012, HMRC began to pilot a new approach to IR35 administration which they developed with feedback from the IR35 Forum.
As part of this pilot HMRC strengthened specialist teams and centralised IR35 enquiries within these teams. They changed their approach to enquiries with the aim of establishing the facts faster and closing enquiries that were low risk quickly. Alongside this HMRC introduced a risk based approach to compliance activity based on whether cases were high, medium or low risk.
HMRC, in partnership with the IR35 Forum, has completed a review of the new administrative approach. A framework for the review can be accessed at.
The final report of the review was published on 5 January 2015.
IR35 and the Employment Allowance
Subject to Parliamentary approval, the Employment Allowance will be available from 6 April 2014.
Employers can claim Employment Allowance against one PAYE scheme. This means they can reduce their employer Class 1 National Insurance contributions (NICs) by up to £2,000 in the 2014 to 2015 tax year.
For companies and businesses within IR35, the Employment Allowance can be claimed if you pay earnings (such as a wage or salary) and have an employer Class 1 NICs liability on those earnings. However, you cannot claim the allowance against any NICs liabilities arising from a deemed employment payment.
More information can be found at https://www.gov.uk/employment-allowance-up-to-2000-off-your-class-1-nics.