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3rd October 2011
Low IR35 enquiry yields prompt call for action
Newly released figures which show the amount of money yielded by HMRC IR35 enquiries have raised concerns about whether the system is necessary.
The statistics show that between April 2010 and April 2011, enquires by the HMRC into the IR35 status of workers yielded just £219,800. The previous year’s yield was £155,502. A total of 25 enquiries were opened in 2009/10 and 2010/11 combined, compared with 25 in 2008/9, 104 in 2007/8 and 158 in 2006/7.
PCG has called for action on the controversial IR35 rules in the light of the figures, which were published on HMRC’s website in response to a Freedom of Information request.
John Brazier, Managing Director of PCG, commented: “These figures confirm what PCG has always said, that the tax yield from IR35 is minimal and that the stress and damage done to the UK’s 1.4 million genuine freelance businesses is completely unnecessary. It also shows us that IR35 is an unwarranted measure introduced by the previous Government.”
However, HMRC said that IR35 legislation acts as a deterrent and for that reason financial yield alone should not be used as a measure of success.
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