HMRC rewords IR35 Forum minutes after staunch criticism

The taxman has quietly reworded the minutes of the IR35 Forum meeting he chairs, following exclusive criticism of them to ContractorUK by a respected forum member.

Small but significant changes have been made to the document that sparked the criticism -- initiated by the forum’s Kate Cottrell, but the main points she seized on have been removed.

Or they have been softened. For example, the original minutes stated: “HMRC has no evidence of significant impact on attrition rates of contractors working in the public sector.”

Since Cottrell spoke out, followed by other members who expressed concerns, the minutes now say, “HMRC has yet to see evidence of significant impact on contractor attrition rates”.

'Delays in projects'

The Revenue then tries to get up-to-date. In what reads like a nod to the admission this month by TfL that the IR35 reforms will postpone its modernisation work, the new minutes say:

“Some members said they had heard anecdotally that there had been…significant delays in public sector projects.”

Less dismissive-sounding, HMRC is “yet to see evidence for this,” a claim made in the freshly formatted minutes, complete with new bold font to highlight actions HMRC is taking.  

'Points raised'

The other obvious difference between the first minutes (uploaded September 24) and the new minutes (uploaded October 31) is that the latter has a ‘Points raised in discussion’ section.

But this seemingly innocuous subheading -- especially when used for the minutes of a meeting -- belies the nature of the content within, Cottrell suggested last night, recalling what happened.

“The meeting started with HMRC circulating a paper headed 'Off-Payroll Update,' which set out HMRC’s view of things.  

“The meeting then progressed to HMRC seeking to know the main issues for external [forum members] and their [respective] members. 

“However”, she added, “by intertwining the views of HMRC and the externals under ‘points raised in discussion’ the message coming out [still] does not reflect the tone of the meeting.”

'Not possible'

Elsewhere though, the minutes offer extra detail. For example, addressing the usage of CEST (the IR35 digital tool), HMRC puts in a caveat to the 450,000 figure which the initial minutes cited.

“It is not possible to attribute the proportion of the 450,000 uses that relates to the public sector reform,” the Revenue concedes in the new minutes, explaining:

“This [450,000] is the number of uses of CEST rather than the number of unique users.”

But then HMRC reminds that it wants CEST to be used in the private sector too, as it says: “CEST also has a wider status application than just off- payroll determinations.”

'Chaos'

“The minutes [still] read from HMRC’s perspective,” Cottrell reflected. “ [The department claims] the implementation of the new rules has been a resounding success.

“And all the alarming issues raised by external [forum members] have been dismissed, either as HMRC having no significant evidence of the same, or they plan to issue some further guidance.”

An ex-tax official turned IR35 adviser to contractors and their clients, Cottrell added: “From this side of the fence, the implementation of the rules caused chaos within the industry and we are still seeing this.”

Editor's Note: Asked about its decision to replace the minutes it published in September, a spokesman for HMRC said: "We routinely circulate minutes of the IR35 forum to attendees for comment before publication; due to an administrative error this time, the minutes were initially published without comment.

"When this was realised, we withdrew them, circulated to stakeholders for comment, then re-published an amended version that took account of the comments received."