IR35 advisers back Cottrell's HMRC critique

Two advisers to contractors have raised serious concerns about July’s IR35 Forum after a member broke cover with ContractorUK to exclusively criticise the meeting’s minutes.

Status expert Kate Cottrell, who attended, was first to reveal that rather than being a straight record of the meeting, the minutes were “just a one-sided view” -- HMRC’s, of how IR35 reforms it made in April have bedded in.

Since publication of her article last Wednesday, similar concerns have now been raised by both the Association of Independent Professionals and the Self-Employed -- another IR35 Forum member, and Qdos, a non-member who specialises in IR35 contract reviews.

“The recent minutes do not accurately reflect the frank discussions at the July meeting and I have today expressed my concern about this to HMRC,” the association’s James Collings said on Thursday.

He added: “In the meeting, myself and other stakeholders raised serious concerns about the significant failings of, and damage created by, the rollout of IR35 changes in the public sector.

“However, these conversations were not captured in the official minutes, which were published without forum members being informed.”  

The content of the minutes seems to be more the issue for Qdos.

“That, according to HMRC, the very tool used to set the employment status of thousands of public sector contractors is still in beta mode and does not have improvements penciled in, is very concerning.”

The status advisory also said: “It’s a risk in itself to leave potentially career-defining decisions around IR35 status to a questionable tool which is constantly being tweaked on the fly.”

A further “worry in itself”, according to Qdos’ CEO Seb Maley, is that the Revenue says the tool has been used to help determine status on as many as 450,000 occasions, despite its unfinished status.

While he says the department should still address “question marks over the tool’s accuracy,” the current onus on HMRC is to not “make the same mistake twice.”

Mr Maley, who once worked at the tax authority, explained: “HMRC were slow to announce public sector IR35 reform, causing chaos for contractors, recruitment agencies and the public sector itself.

“If they have plans to extend reform to the private sector -- which these minutes hint at -- they have a responsibility to end the ambiguity and give contractors and agencies suitable time to prepare.”

At IPSE, Mr Collings agrees that a forthcoming HMRC is overdue. “The [April IR35] reforms have, in fact, caused many contractors to turn their backs on the public sector entirely, and HMRC must be honest about the problems associated with this complex and onerous legislation,” he said.