Mr Mark Prisk – 2014 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Mr Mark Prisk on 2014-02-06.

To ask Mr Chancellor of the Exchequer, what estimate he has made of the additional revenue secured since 2010 as a result of changes to the IR35 tax regulations affecting the self-employed.

Mr David Gauke

The intermediaries’ legislation, known as IR35, does not apply to the self-employed, rather it applies to those providing their services through an intermediary (normally a limited company) who if it were not for the intermediary would otherwise be considered an employee of the client. IR35 ensures that under such circumstances broadly the same tax and National Insurance contributions are paid as if the individual were directly employed.

A very minor change to the IR35 legislation was made in 2010 in consequence of the Corporation Taxes Act 2010.

HM Revenue and Customs (HMRC) have currently four specialist compliance teams which undertake investigations of intermediaries (commonly called personal service companies) operating across all sectors where potential non-compliance with IR35 is suspected. These teams form part of a restructuring of HMRC’s administration of IR35 following recommendations in March 2011 by the Office of Tax Simplification. Revenue secured under IR35 from this direct compliance activity between 6 April 2010 and 5 April 2013 is £2.519m. Figures for 2013/14 are not currently available.