HMRC have taken this decision as the Public and Commercial Services Union (PCS) confirmed that the proposed strike action by call centre and enquiry office staff was definitely going ahead on 31st January.

They had previously said that if a taxpayer were unable to file because they were not able to get advice on deadline day, then they would have to appeal any penalty under the ‘reasonable excuse’ provisions, which would be dealt with on a ‘case by case basis’. However, they have now changed their position;

“Strike action by HMRC staff will mean that many people who want to file their SA return on 31 January and try to phone us with questions they need answered to do that will not be able to get through. Because of this nobody who files online on 1 or 2 February this year will get a late filing penalty.”

David Gauke, Exchequer Secretary to the Treasury, commented:

“This strike could have caused thousands of people to incur fines, so I am pleased that HMRC has taken this common sense approach. The Government does not want anyone trying to file their tax return on time to be unfairly penalised because they were unable to get through for help and advice on the 31st.”

Reed paid 500,000 temporary workers between 1998 and 2006 daily payments which covered lunch, up to £6, and commuting, up to £11.45. They were meant to be part of a salary sacrifice agreement but it has appeared that no real arrangement was in place for the six 12-month periods to 2006.

Reported by the Daily Mail, the tribunal judges conceded that Reed would be unable to reclaim the £158million in tax and National Insurance from the temporary workers, who were the ones who should have paid it.

A spokesman for Reed said the company was ‘extremely disappointed’ with the decision and that it disputed the figure of £158 million, saying it would appeal.

HMRC met with regular member of the forum on January 11th in order to have detailed discussions about the administrational plans for IR35 and the current ideas for the planned business test. A spokesperson confirmed that “following working groups with the external stakeholders, we felt that there was more work to do prior to holding another full Forum meeting”, which led to the postponement.

One of the groups involved in the IR35 Forum, the REC, spoke about the discussions in the November IR35 Forum meeting , which included issues surrounding this tiered business test. They believe that this would help to sift out lower risk IR35 cases and give contractors clarity on their self employed status.

Whilst they also confirmed that progress on the business test required further discussions with HMRC, their representative on the IR35 Forum, Gillian Econopouly, spoke positively of the role of the group. She commented;

“Being involved in the IR35 Forum has provided a unique platform for taking forward the views and recommendations of recruiters in sectors such as technology, engineering and interim management. Whilst the discussions are taking time, we are working hard to establish common ground with HMRC and remain confident that we can help deliver genuine simplification for recruiters and the contractors they place.”

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor

In an official statement HMRC said that following consultation with representative bodies, they have started a detailed review of the BRC project. They go on to say that the pilot tests have caused “considerable concern to the tax profession” and that “the project would have benefited from more detailed consultation with tax professionals at an earlier stage.”

HMRC, who will be working with the CIOT during the review, continued; “The purpose of the review is to consider the overall aims of BRCs, examine whether the current approach is the best way of achieving the policy objectives and identify what changes are needed to ensure that the objectives are achieved.”

There was pressure to review this project from a number of industry bodies, including the Federation of Small Businesses. The FSB expressed their concern to HMRC on a number of occasions but felt that the government were determined to make this policy happen. Chairman John Walker previously claimed that “despite the worsening economy, HMRC [are] launching this scheme regardless of the consequences” and so the decision to review will go down well.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

A series of 30-minute walkouts are scheduled for 10am and 4.30pm today (16/01), but will culminate on January 31^st, self-assessment tax deadline day. The walkouts are at HMRC call centres and enquiry offices and will affect anyone trying to contact these centres. It is likely to cause huge inconvenience for millions of higher-rate taxpayers and those with untaxed income, such as landlords, freelancers and sole traders, who are required to submit a tax return each year.

Reported on Contractor UK, organisers, the Public and Commercial Services union, admit they have chosen to take this action on these specific dates to have maximum impact. They are opposing the planned move towards privatisation.

Speaking about the plans, the union said: “If HMRC believes there are issues to address in its call centres, it should invest in its own staff and in training, instead of handing public money to private companies.”

An HMRC spokesman said: “The project is not about outsourcing or replacing HMRC jobs. It is ultimately about finding ways to improve the service we provide.”

Bob Jones, a former Inland Revenue tax inspector however reassured the contractor not to be afraid of changing accountants but to ensure they chose accountants that were able to fulfil all the necessary requirements.

Speaking on Contractor UK, Mr Jones said;

“HMRC do not publish their risk analysis strategy, but they are generally more interested in the figures in the accounts rather than the firm involved in the production. Remember though that whether local or offline, a professionally qualified accountant has been trained and must adhere to certain standards. If you look for an accountant outside that sphere then, of course, you do need to be careful. HMRC are aware that there are certain tax advisers that should really be doing something else!”

“The bottom line is that changing accountant should not cause a problem provided you go to someone who is reputable and, preferably, qualified.”

Independent Contractor Services (ICS) offer accounting and payroll solutions to the contractor marketplace. Guided by the principles of trust, care and compliance, we specialise in Umbrella, Limited Company and Sole Trader solutions.

If you are choosing to file online and you have not done it before, you will have to register for online filing, and this requires postal verification which can take up to 10 days.

HMRC are set to be harsher on those that file their return past this date by, for the first time, charging you a fixed penalty and also an additional charge for each day over the deadline date you go. The penalties for late submission of returns have been toughened this year in three ways:

1. £100 fixed penalty for submitting your tax return late even if you have no additional tax to pay.
2. If the return is over three months late there is an additional £10 daily charge for up to 90 days.
3. The subsequent, further fixed penalties have been replaced by a sliding scale starting at £300, depending on the tax owed and the length of delay before payment is made.

The Chartered Institute of Taxation (CIOT) is warning taxpayers to file early. Tina Riches, Technical Director at the CIOT, said: “Time is running out for Self Assessment taxpayers who want to avoid HMRC’s new penalty regime. Midnight on January 31 is the deadline – there is no day’s grace this year.”

Kate Cottrell, of employment law specialists Bauer and Cottrell, spoke to Shout99 to offer an expert view of the current IR35 situation following the risk assessment discussed in November’s meeting. The way that HMRC identify potential IR35 investigations has been one of the key topics in the previous IR35 Forum meetings.

Ms Cottrell revealed that current HMRC proposals focus on their ‘risk profiling policy’. “This is the system they use to decide whether or not to investigate you in the first place. This will enable HMRC generally to restrict IR35 investigations to ‘high risk’ cases.”

She continued saying that high risk cases will be outlined by April, bringing clarity to those involved. It was also stated that HMRC are committed to improving their compliance activity for these cases which could lead to more high risk investigations. Whilst she admitted that there is still a lot of work to do, Ms Cottrell said “we should have a much improved administration of IR35 by April 2012.”

There were further interesting comments regarding HMRC’s IR35 strategy, with the high risk cases expected to be targeted in order to “yield significant sums compared to the past”. Ms Cottrell called this “good news so far for those at low risk, providing we can reach agreement on who falls into which group and providing we have good guidance and support. When this is achieved IR35 will be much easier to deal with for everyone.”

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

Recent figures regarding HMRC revenue from tax evasion and avoidance investigations totalled £16.5 billion in the last 12 months. This was a 37% rise from last year figure of £12 billion which has been linked to the aggressive approach that HMRC have taken in the last year, especially in regards to the review of IR35.

A leading accountancy firm, UHY Hacker Young, commented on these figures saying that the government and HMRC “seem to believe that they found the secret of alchemy.” A spokesman from the firm continued that, “All they need to do is invest more money in tax investigations and compliance work and the extra tax income will keep flooding in.”

With HMRC clamping down on taxation issues across all sectors it is becoming more important than ever to remain compliant, especially with new regulations including the Agency Workers Regulations adding extra red tape to small UK businesses.

ICS are one of the leading contractor accountants and administration companies and have helped thousands of contractors working in a range of industry sectors. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.

Following the October IR35 Forum meeting, HMRC and the PCG both presented their views and ideas. After discussing the clarification of lower risk IR35 cases in October HMRC proposed amending their risk rules, and are aiming to focus increasing their compliance activity against higher risk cases being used to disguise employment.

The PCG also presented further information about any future IR35 business tests, which were one of the three original proposals earlier this year.  They announced that they are now looking at a ‘tiered test’ approach, which would require the use of particular indicators and HMRC data.

One of the action points for the forum’s next meeting in January was for HMRC to identify and agree on the indicators that define a business for the purposes of IR35. They also agreed to provide an update on the four main areas currently under discussion; these being the IR35 Helpline, Guidance, Risk and Review.

A full update of the IR35 Forum’s minutes can be found on the HMRC website.

ICS work with a team of experts in employment and tax law to ensure our services are fully compliant with existing IR35 legislation and the latest government regulations, such as the AWR. You can contact us now for a tailored proposal based on your individual circumstances as a contractor.