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Clarifying tax rules for IR35 compliance on the horizon?

While it may seem like nothing besides confusion and misery has come out of Her Majesty’s Revenue and Customs when it comes down to contractor accounting, one industry trade body says that new clarifying tax rules for IR35 compliance are actually on the horizon.

Maybe the Recruitment and Employment Confederation knows something we don’t know,considering how abysmal the latest IR35 guidelines have been when it came to making things clearer, more concise, and more accurate. All the average contractor or freelancer knows is that the ‘disguised employment’ rules have gotten absolutely byzantine recently, even though the legislation hasn’t actually changed.

Well, Gillian Econopouly, the REC’s head of policy, says that the IR35 Forum is currently looking into making it less of a headache to deal with the legislation as it stands now. Ms Econpouly, which is the REC’s representative on the Forum, says that the other Forum members, the Freelancer and Contractor Services Association, the Chartered Institute of Taxation, and the PCG, are keen to clarify IR35 rules for worried contractors.

And contractors are worried. These latest guidance documents are more or less worthless, considering they muddy the waters to the point where people who have absolutely no danger of being flagged as being under disguised employment as ‘high risk’ instead – which could lead to costly investigations by HMRC that turn out to be all for naught and a waste of taxpayer money.

If change can come, it had better be soon – people are starting to wonder if the taxman is asleep at the wheel.

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