18th January 2012

IR35 Forum considers tiered test

The IR35 Forum has taken a close look at using a tiered test system to establish self-employed status.

According to the Recruitment and Employment Confederation (REC), the issue was raised at the latest meeting with the aim of providing a way of giving contractors clarity on their tax situation.

While the proposals have been put forward before, this discussion went into greater depth and considered how best to use specific indicators to determine the level of HM Revenue & Customs (HMRC) intervention required. Now the IR35 Forum will be required to work with HMRC and decide what type of indicators would work best.

Gillian Econopouly, head of policy at the Recruitment and Employment Confederation and a representative on the IR35 Forum, commented: “We continue to work closely with HMRC and other expert groups such as the PCG, FCSA and ICAEW to drive operational improvements and provide clarity for self-employed contractors and the agencies they work through.

“The aim is to find clearer ways to establish the status of contractors and to dissipate the mist of uncertainty that has surrounded the IR35 rules.”

Ms Econopouly added that the REC is confident the group will provide "genuine simplification for recruiters and the contractors they place" once the forum has had enough time to come to a conclusion.