Following yet more criticism of the IR35 legislation recently, there has been some news which might reassure those who are concerned that the process is getting less transparent rather than being clarified further. There are a number of freelancers who are engaged with ongoing disputes over their IR35 status , and taking on the taxman is not easy business. However, details of some of these disagreements over their statuses will be made public as they will be taken to a tribunal according to the minutes of November’s IR35 forum.
Although there were concerns last week that the IR35 forum was actually making it harder to understand their reasoning by limiting what is included in their meeting minutes, there news that the cases which are still outstanding will be going to tribunal has been welcomed. Although normally the idea of a tribunal is one which people would prefer to avoid, in this case it is being seen as an opportunity for freelancers who have solid grounds to challenge a decision to finally thrash out some of the details in front of a tribunal.
There are two ways to object to a decision made internally by HMRC, one of which is an internal review by tax staff and the other is an appeal directly to the tribunal. Because the tribunal appeal will result in a binding judgement, the results will be eagerly awaited as they will take into account not only HMRC’s interpretation of the working practices of the freelancers involved, but also the evidence presented on the day.
The freelancers who have appealed to the tribunal to hear their cases have passed HMRC’s cost-benefit test, used to determine whether it is worth the department fighting their cases at tribunal. Freelancers have the choice as to whether to represent themselves at the tribunal, which is traditionally seen as a risky option, but does provide a legitimate way to head-off any cross examination by HMRC.
Any freelancer whose case goes before the tribunal and who doesn’t agree with the outcome will be able to take their case to higher courts through the appeals process, which will be of interest to many who believe that a firm and final ruling on IR35 is needed to end speculation and confusion.
If you find the long-running controversy over IR35 confusing, then our guide to IR35 could help you to understand some of the issues and get a handle on why you are always hearing about the legislation. If you want to know more about what it’s like to work as a contractor, then you can have a look at our Life as a Contractor case studies which will give you some insider information about the reality of working for yourself. We also have a range of free contractor guides which will provide all the information you could wish for about working for yourself, not to mention our comprehensive guide on the advantages and disadvantages of going limited.
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