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IR35 risk profiles likely to be the future of HMRC compliance campaign

IR35 risk profiles are likely to underpin HMRC’s IR35 compliance campaign, once the full results of the IR35 Forum’s results are revealed.

Details of the new regime’s 12-month pilot are believed to have been finalised at the latest meeting of the IR35 Forum on 8th March 2012, and are expected to be announced in the 2012 Budget delivered by the Chancellor George Osborne on 21st March.

Although HMRC has repeatedly resisted attempts by Forum members to divulge greater detail about its risk profiling for contractors, records of Forum meetings confirm that any new IR35 risk profiles will provide sufficient detail to allow contractors to self-determine their broad IR35 risk category.

According to the Recruitment and Employment Confederation’s (REC) Head of Policy, Gillian Econopouly, who is a member of the Forum, making recommendations on improvements to the operational aspects of IR35 has been only one part of the Forum’s work.

The focus has been also on “how to provide more clarity for self-employed individuals about their potential risk of an IR35 investigation”, says Econopouly. She also confirms that “ April 6 [is the] deadline when the Government will formally adopt changes to how the IR35 regime is administered.”

But a recent Freedom of Information (FOI) Act request response has revealed that HMRC only employs 29 Employee Status Inspectors. So any new pilot compliance campaigns announced in the Budget are likely to ramp up slowly, as HMRC builds its team of IR35 specialists.

Full details of the new IR35 risk profiles will be available on ContractorCalculator following their publication after the Budget on 21st March 2012.

Published: 17 March 2012

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