Kitty Ussher, a government minister has refused to reveal information relating to HM Revenue and Customs IR35 investigations for fear it would lead to increased non-compliance.
Labour MP Terry Rooney asked Usher, in one of her final Commons appearances, how many IR35 investigations had been launched within the last five years. He went on also to ask how many of those IR35 investigations resulted in prosecution, an increase in tax or no further action. The minister responded;
“Disclosure of HM Revenue and Customs’ compliance data relating to the legislation would result in a risk of non- compliance with the legislation. Accordingly I am not able to provide the data requested.”
The Professional Contractors Group is disappointed with this response as they don’t believe it to be in the public interest that the effectiveness of tax legislation should be kept undisclosed. A previous Freedom of Information Act request from the PCG showed that the legislation was only raising £1.5 million per tax year.
PCG Board member, Gary Sharp, commented: “The Government has never previously stated that information on the financial details of IR35 would encourage people to ignore it – this is a new development. No-one in PCG would ever suggest anyone breaks the law. However we know IR35 is, ineffective, inefficient, costly to taxpayers and Government alike. It is frequently misapplied and if you are paying, we could well surmise from this Parliamentary answer, that you could be in a minority.”
Ms Ussher later resigned after she was confronted with allegations by The Daily Telegraph that she avoided paying tax on a second home.
