IPSE has raised concerns about the credibility of HMRC to oversee compliance with the changes to IR35 in the private sector after its latest tribunal defeat.
The warning came in response to the news that ITV presenter Helen Fospero has become the latest TV presenter to defeat HMRC in an IR35 tax tribunal.
Andy Chamberlain, IPSE’s Deputy Director of Policy, said: “This is the second IR35 tribunal judgement that has come to light this week that HMRC has lost. That drives home the reality that IR35 legislation is so complex that even the UK’s tax authority cannot understand it. And if HMRC cannot grasp its own legislation, how can it expect businesses across the UK to when it changes IR35 in the private sector next April?
“The two cases this week – concerning an IT contractor and TV presenter Helen Fospero – both hinged on the absence of ‘mutuality of obligation’ in their engagements. This is critical because HMRC refuses to accept that there can ever be a contract where ‘mutuality’ is absent.
“The fact that HMRC has been judged wrong on this – and that it clearly cannot understand its own legislation – fatally undermines its CEST (Check Employment Status for Tax) tool, which freelancers are supposed to be able to use to determine their IR35 status.
“It also calls into the question the veracity of HMRC’s advice to public sector organisations about the status of their engagements – and raises concerns about its credibility and authority to oversee compliance in the private sector from next April. How will businesses be able to trust HMRC’s judgement when it continually loses IR35 tribunals?”
