HMRC Contract Review service sits firmly on the fence

The minutes of the latest IR35 forum published by HMRC reveal the astonishing statistic that in almost 9 out of 10 cases HMRC’s contract review service has failed to provide a conclusive opinion about IR35.

When HMRC launched the Business Entity Tests in May 2012, the promise was of greater certainty over IR35.  The guidance document promised that HMRC’s specialists working independently of compliance teams would review contracts and, if satisfied, give a certificate of IR35 compliance that would be valid for three years.  However, the reality of the situation is that HMRC have only given a firm opinion on a meagre 10 cases.  The forum minutes do not say whether those cases were within IR35 or not.

HMRC claims that this failure of the service to live up to expectations is due to “the extent to which complete certainty was required” and a reluctance to provide further information or allow HMRC to approach the end-user.  This last excuse betrays HMRC’s fundamental lack of appreciation about the commercial impact of IR35, the precarious nature of being a contractor, and the damage that can be caused to the end client relationship by HMRC’s mere involvement – something we have complained bitterly about over the years.

Needless to say Chartergates’s own Contract Review Service and Guaranteed Defence will provide contractors with the certainty and reassurance they need when it comes to IR35.