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HMRC gives reassurance on retrospective IR35 enquiries

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The Association of Tax Technicians (ATT) has welcomed confirmation in last week’s IR35 Issue briefing that, following employment status changes notified after April 2020, HMRC will only open enquiries into earlier years where fraud or criminal behaviour is suspected.

HMRC’s Issue briefing: reform of off-payroll working rules (, provided an update on the factsheet first published alongside the Budget in October 2018 concerning the IR35 changes taking place from April 2020. This factsheet was revised in July 2019 to take account of the government’s consultation responses and draft Finance Bill legislation. While the revised factsheet stated that the reforms were not intended to be retrospective, it said only that new employment status decisions would not ‘automatically’ trigger an enquiry into earlier years.

Welcoming the new clarity, Jon Stride, co-chair of the ATT’s technical steering group, said: ‘The new policy paper states that HMRC will only use the information they receive following the changes to open an enquiry if they have reason to suspect fraud or criminal behaviour. This is a high bar to clear and is a welcome pragmatic approach by HMRC. It also builds on earlier statements that the reforms are not intended to be retrospective’.

‘Without the assurance now contained in the policy paper, contractors were understandably concerned that recognition of a different status from April 2020 could give HMRC grounds for seeking additional tax for earlier years. The risk of any such retrospective enquiry is substantially reduced by HMRC’s clarification’, Stride added.

Issue: 1463
Categories: News