An 'interesting' month for IR35
In a month where the Labour Party has announced that, if elected, it would halt the proposed IR35 changes due next April, HMRC has continued its losing streak. Two cases were reported in The Register:
HMRC lost both because of a lack of mutuality of obligations. The businesses weren't obliged to provide the contractors with work and when they did, the contractors were not obliged to do it. These are factors pointing to self-employment.
On 25 November 2019, HMRC updated its Check Employment Status for Tax tool (CEST), intended to enable taxpayers and their advisers to check an individual's employment status by answering a series of questions.
HMRC's online assessment tool doesn't recognise the concept of mutuality of obligation, which is where it is falling down. Given the number of embarrassing, high-profile defeats, it will be interesting to see whether it continues to prosecute as aggressively when the legislation changes next year.
We have a briefing note on employment status. Please speak to us if you need help to determine the status of those that work with you or to draft an appropriate contract to describe the working arrangement.