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HMRC Claim IR35 tool hits targets, but no data is held to support this

According to Contractor Calculator, HMRC claim that their Employment Status Service Tool – the online tool they have designed for hirers and contractors to determine IR35 status – has been used more than 186,000 times and was able to provide an answer in 80-90% of cases.

However, in response to a freedom of information request submitted by Contractor Calculator, HMRC indicated that usage had increased to 350,000 but the tool does not record the results.

It should be clear to all that these two “facts” don’t add up. If the tool doesn’t record the answer, how does HMRC know an answer was provided in 80-90% of cases?

In their article, Contractor Calculator promise to continue their investigation. “One advantage of not recording anything is that no-one - including Contractor Calculator via FOI requests - can access the data. But we’ll make some more enquiries and let you know what happens.”

They also point to HMRC’s dubious record in this area. “Releasing questionable statistics is hardly uncharted territory for the taxman. HMRC has been justifying its attack on the contracting sector by maintaining that 90% of those that should be complying with IR35, aren’t – and we’re still awaiting proof of that claim.”

So which is correct? Is the quoted 80-90% response rate just plucked out of the air, or is HMRC refusing to share data for fear of further embarrassment? It’s impossible to tell at this stage.

HMRC’s Employment Status Service Tool has been criticised by many experts for failing to take account of case law and providing inaccurate results.

For information about your IR35 status, you might want to check out our online test, which was created in partnership with Contractor Calculator.

If you have questions about IR35 or if Orange Genie can help in any way please call our expert team on 01296 468 483 or email info@orangegenie.com.

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