Corporate report

IR35: Estimating the administrative burden

An updated administrative impact assessment note from HMRC setting out the current administrative costs which taxpayers incur in dealing with IR35.

Documents

Estimating the administrative burden of IR35 and the cost of abolishing it

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Details

This report is in response to a recommendation from the House of Lords Select Committee on Personal Service Companies in 2014.

The 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

HMRC estimates that the annual administrative burden of IR35 is £16m and the revenue protected is £550m.

IR35 is anti-avoidance legislation designed to tackle tax and NICs avoidance through the use of intermediaries. IR35 seeks to ensure that people who provide their services through their own limited company to disguise what would otherwise be an employment relationship, pay broadly the same amount of tax and NICs as other employees.

Published 12 March 2015