IR35 ‘Light Touch’ Penalty Approach to end
01 February 2022
- By April 2022 the IR35 reforms in the private sector will have been in place 12 months
- HMRC announced that customers would not have to pay penalties for inaccuracies in the first 12 months, unless there was evidence of non-compliance
- As 12 months is almost up, this “light touch” approach will end
- In this regard, businesses may accumulate penalties where HMRC raise an assessment on the basis that they has not taken reasonable care when making decisions about IR35
- See HMRC’s factsheet regarding penalties here
Aspire comment
HMRC are beginning to make status enquiries and review businesses in the private sector’s IR35 processes that led to their decision making. Review your IR35 processes now!
If you are a “client” for IR35 purposes, you must ensure that you are taking reasonable care in making status determinations and passing your decisions to the correct individuals/entities.
If you are the ‘deemed employer’ or ‘fee payer’, then you must check you are deducting and paying the right liabilities where you have been told that the status determination is inside IR35.
Give Aspire a call for IR35 related services such as;
- Drafting or reviewing/updating contracts
- Drafting or reviewing/updating IR35 processes
- Including the Status Determination Statement decision making process
- Reviewing your labour supply chain