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HMRC publishes more obscufatory IR35 guidance

Simply because the taxman didn’t go far enough in making disguised employment completely incomprehensible, HMRC has come out with even more guidance recently.

Her Majesty’ Revenue & Customs published a consultation on false self employment just under a month ago, and it looks like the squints at the Treasury has finally gotten around to distilling that consultation down to new guidance for contractors. The majority of the new information is geared towards making sure contractors steer clear of using personal service companies, as HMRC has a serious vendetta against the organisations after evidence emerged over the last year or so how crooked employees were using PSCs to filter their pay and avoid paying their fair share of tax.

Now on the surface this does sound like a good thing, doesn’t it? I mean warning contractors and other self-employed Brits from using PSCs could help them avoid falling under investigation for IR35, and that’s a positive thing. But before we get all caught up in how everything’s coming up roses for HMRC, let me remind you all about how badly the last time the taxman released an IR35 guidance document and how horribly bollixed it was.

To this day, there’s still fallout from HMRC’s guidance it published a year or so ago, simply because it did nothing to straighten things out for small businesses, contractors, and employees. In fact it just made things much worse in that the new guidance made it absolutely impossible to determine if you were at risk for being investigated for disguised employment or not. Not only that but suddenly individuals that were previously not at risk at all or had a very low risk under IR35 were suddenly reclassified as high risk based on the new guidance, despite the fact that the actual disguised employment legislation hadn’t even changed at all.

So yes, you’ll have to excuse me if I’m more than a little suspicious about this new guidance coming from the tax authority. Once bitten twice shy and all that, I suppose. Still you should most likely be a bit skeptical as well, considering HMRC’s track record with completely mangling things even though it’s making best efforts to streamline and simplify them instead. It’s just a pattern that I’ve seen emerge and I wouldn’t be surprised if it continues for the foreseeable future!

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