IR35 update for technology contractors

Are you worried about the tax impact of working inside IR35 post April?

worried man

We are getting asked by lots of technology contractors what will happen if they have to move inside IR35 on their current assignment after April (when currently outside).

Lots of contractors are being asked to work inside IR35 post April 2021 as an extension of their assignment where they have previously sat outside IR35. An obvious concern being raised is, will HMRC view this negatively and consider retrospective tax for these contractors?

Many technology professionals are concerned about the risk of retrospective action. I asked Tax Expert, ex HMRC inspector and Head of Tax at Kingsbridge, Andy Vessy, his advice.

Here’s what he had to say

“HMRC have, for some time now, repeatedly stated that they will not use information acquired as a result of the changes to the off-payroll working rules to open new enquiries into years prior to 2021/22 unless the department has reason to suspect fraud or other criminal behaviour (this would be very extreme behaviour). The department has even committed to this pledge in their guidance ESM10036.

Furthermore, once we have seen off the worst of this pandemic, I doubt that HMRC will have sufficient resources to carry out many immediate IR35 enquiries anyhow as they will be spending a fair amount of time carrying out compliance checks into CJRS claims that they believe have been overstated or fraudulently claimed.”

Sarah Pawson

Managing Director at Fruition IT

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