HMRC works with the IR35 Forum to improve the way in which IR35 is administrated.
The IR35 Forum is a group of external stakeholders who meet regularly with 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 (OTS) 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 on a quarterly basis.
|Chartered Institute of Taxation|
|Institute of Chartered Accountants in England and Wales|
|Federation of Small Business|
|Freelancer & Contractor Services Association|
|Professional Contractors Group|
|Recruitment and Employment Confederation|
|The Association of Professional Staffing Companies|
|Kate Cottrell - IR35 Specialist|
|Association of Chartered Certified Accountants|
Terms of Reference
To advise on improvements in the administration of IR35 and in a transparent manner to assist HMRC in:
- identifying specific areas for improvement in the administration of IR35
- developing an overarching strategy for dealing with the administration of IR35
- designing specific approaches and steps within the overarching strategy
- identifying and agreeing measures of success against which to judge improvements
- monitoring the implementation of the new strategy and progress against agreed measures of success
- reporting on progress in implementing improvements to the administration of IR35
Minutes are held quarterly.
Minutes from previous years are available via the National Archives:
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 HM Revenue & Customs (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 upon 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 NICs by up to £2000 in the 2014/15 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.