Carrington Accountancy have come up with a novel way to keep their contractors abreast with the latest changes in legislation and tax planning.

So our Beloved Leader has finally allowed us an election. Good news on several fronts. I make no secret of my desire to see the end of the current Parliament in general and our sitting PM in particular.

At one point it seemed as though HMRC’s radar was focused solely on the Construction Industry, but now their gaze has fallen hard and fast on limited company contractors (yet again). In the last month Accountax have seen a 162 % increase in the number of IR35 enquiries instigated by HMRC.

It is often heard that contractors routinely close down their companies in order to avoid IR35 investigations: the logic is that if the company no longer exists, it can’t be investigated. Sadly, perhaps, this is not actually the case.

While it is fair to say that IR35 will have an impact on your own net income, quantifying exactly how much impact is not that simple, since there are several variables. You can, however, compare the overall results in general terms.

The intention of IR35 is very simply expressed: if you are working as an employee of your client then you should pay the same taxes as an employee of that client. You can’t avoid paying those taxes simply by saying you are a freelance contractor, you have to be able to prove it.

The recent move from the Special Commissioners to the Tax Tribunal brought about a number of changes to the processes leading up to, and including, a hearing. One such change is the right to request, or accept an offer of, an independent review (once Determinations and Decisions have been raised) before the case is to be listed for a hearing.

This is not and does not claim to be a definitive guide to IR35 and how to avoid its clutches. That is something that has defeated many experts over the last ten years. However, I hope to provide a summary of what we do know about IR35, what all the arcane acronyms really mean, and which bits are the important ones.