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Survey: Is IR35 a necessary nuisance?

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31st Oct 2014
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With more than 300 responses collected so far, AccountingWEB’s IR35 campaign survey has confirmed that this issue is a concern for the vast majority of AccountingWEB members. Only 11% of those accountants who have taken part so far said otherwise.

But there is a silent majority who see the need for the measure. Going against the tone of more noisy communities for whom the tax status of freelancers is paramount, 54% of respondents agreed with the statement that “IR35 has helped prevent false self-employment abuses”.

Yet the personal services companies regime still poses an administrative burden: 30% of the first wave of survey respondents agreed that the number of clients caught up in HMRC IR35 enquiries had increased.

Among early respondents, 30% had experienced HMRC interventions on IR35 during the past year; a 10% subset of this group dealt with between 2 and 10 enquiries during that time.

The case for arguing that tax arrangements were influencing business strategy was only partially supported; 27% of respondents said IR35 has been a factor in suggesting incorporation to clients who might otherwise not have needed it. Another 19% said it had held clients back from new business opportunities.

Determining clients’ employment status was the biggest problem for 58%, followed by the challenge of determining a salary/dividend split that satisfied both the client and HMRC. In spite of the increasing volume of IR35 enquiries, only 7% of respondents said this caused them the most trouble this year.

The IR35 workload typically makes up a quarter or less of the respondents’ activity, with 10% reporting it occupied between 25% and 50% of their time. Nearly a tenth (9%) did not engage in IR35 work, while a small band of 3% specialised in this area.

  • As more data is collected, the survey will look into:
  • Preferred solutions - bespoke advice based on individuals’ contractual arrangements dominate this answer, with 48% of current respondents selecting this option
  • Fee levels - nearly half currently charge less than £1,000 a year for these clients
  • Experiences of dealing with HMRC - weakspots in guidance and staff competence have been identified); and suggestions for resolving problems created by IR35.

Take part in the survey now to get a copy of the initial findings, and be sure to register for our online seminar on 28 November, where representatives from FreeAgent, Tolley and Qdos will discuss all these issues in more detail.

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By phibber
02nd Nov 2014 20:36

Broken Link

Link in article appears broken

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
03rd Nov 2014 09:20

Apologies - try this link

Sorry for not getting the link right. Can you see if this one works? 

http://survey.clicktools.com/go?iv=1c7olokyiyv66

We'll fix the article links once we find the correct format. Please accept our apologies for any frustration/inconveniance caused.

[Update - it should work now. Sorry again]

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