IR35 status – Blanket decision-making

Recent guidance from HMRC has clarified the question of blanket decision-making confirming that this is not allowed. The IR35 status of all contractors must be assessed and determinations need to be made on a case-by-case basis.

According to the new HMRC guidance document published 27th February “The client must take reasonable care when determining whether the worker would have been an employee if they were engaged directly.

“If the client fails to take reasonable care, the responsibility for the deduction of tax, NICs and apprenticeship levy and paying these to HMRC will rest with them.” 

Quoti8ng from the document examples of not taking reasonable care include:

“Examples of behaviours which do not constitute reasonable care include, but are not limited to:

  • Determining that every worker who provides their services through an intermediary is caught by the off-payroll working rules without giving any consideration to the specific facts of each individual case.
  • Determining that the off-payroll working rules apply to a large group of workers who have some variations between the work that is being carried out, without giving proper consideration to the different working arrangements for each worker.”

If this holds, this is fantastic news for contractors who can now go to their IR35 contractor blanket ban companies and challenge their decision.

If this hold up then the contracting profession might be saved. However, we will only know when the Budget is out.

 

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