HMRC’s rare IR35 win shines light on dangers of complex tax legislation
IR35 specialist, Qdos, has responded to the breaking news that HMRC has successfully appealed an IR35 case in which it argued that Talksport presenter, Paul Hawksbee, should have been classed as an employee for tax purposes during the tax years 2012/13 to 2014/15.
As a result, Mr Hawksbee will be expected to repay the reported £140,000 owed in tax liabilities.
Seb Maley, Qdos CEO, commented:
“This is a rare win for HMRC, but one that shines a light on the needless complexity of the IR35 legislation, which can easily be misinterpreted and misapplied. It also shows the significant sums that are very often at stake in these tax cases, with Mr Hawksbee now expected to repay a reported £140,000 to HMRC. It’s why, for this very reason, contractors choose to protect themselves with IR35 insurance. It’s also why many private sector companies, that will carry the risk next year, are encouraged to do the same.
“The fact that this case was by no means clear cut also goes to show how important it is that IR35 status is set with care and after careful consideration of the written contract and a review of the working practices. Contractors, along with hiring organisations and recruitment agencies, need to be acutely aware of this when deciding if the service provided reflects self-employment or employment.
“As concerning as this result is, it’s worth pointing out that Mr Hawksbee’s engagement – like many other presenters who have faced an IR35 investigation – is quite different from a typical contractor’s. In our experience, the vast majority of contractors are genuine and belong outside IR35.”
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