Employment Tax

Risk assessment for off payroll working (IR35)

Produced by Tolley
  • 17 Nov 2021 12:07

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Risk assessment for off payroll working (IR35)
  • HMRC guidance

Risk assessment for off payroll working (IR35)

HMRC’s basic position is that personal service companies (PSCs) should be able to self-assess whether or not the off-payroll rules (also known as the intermediary rules or IR35) apply, but it also holds the view that there is “significant non-compliance” with the IR35 rules (see the 2015 IR35 Discussion document, page 4), although there are no reliable statistics in this area. Whatever the level of non-compliance with the IR35 regime, it is not at all clear to what extent it is attributable to ignorance of the rules, an inability to navigate those rules, businesses and advisers coming to a different conclusion to HMRC on the basis of the facts or deliberate non-compliance.

Against this backdrop, it is easy to understand why HMRC compliance teams focus on IR35, but it can be hard for any PSC (or its adviser) to assess its own level of risk of IR35 challenge from one of those compliance teams.

Some businesses may choose to use HMRC’s Check Employment Status for Tax (CEST) tool. The benefit of using this tool is that it will give an output that the business can rely on should HMRC review

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