Changes to IR35 self-assessment due in May
The news that revisions to the IR35 process to test a businesses tax exposure are due in early May, will no doubt peak many contractors interest.
Kate Cottrell, an ex-employee of HM Revenue, now specialising in advice on the IR35 process with Bauer and Cottrell, revealed from conversations with HMRC that “May 7th 2012 is when I’ve been told by HMRC that the IR35 business test and the IR35 scenarios, along with the all important guidance on how each should be used, will go live on its website”.
At present, HMRC have been consistently reticent in explaining why the reforms were delayed from the expected release in April 2012. Officials have simply stated that the alterations are due to be accessible from early May; a decision that would appear to be ill-timed for many businesses considering it falls on a bank holiday.
Contractors are being warned to avoid the majority of case scenario examples that many contracting based websites have published recently, apparently based on the up-coming changes. The clear advice is to review the soon to be released IR35 guidance, as it appears to be the case that these documents will set out the new guidelines to the testing process, how this should be put into practice and a range of scenarios that demonstrate the methods and define the inherent legislative changes.
However, not all industry experts are placing their confidence in the new data. Contractor Essentials, specialists in limited company tax and accountancy, stated “We are not encouraging our contractors to read the scenarios; they will have no force in law and will only seek to alarm contractors, unnecessarily.” And the overriding fear appears to be that the updates could complicate matters further, as The Law Place, an IR35 advice company warns of further “confusion and dispute” within the already complex debate.
Article by: Simon Butler, Senior Mortgage Consultant at Contractor Mortgages Made Easy
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