IR35 not as lucrative as HMRC's predictions

Date: 28th October 2011

The government's IR35 tax legislation has not been as lucrative as HM Revenue & Customs (HMRC) originally anticipated.

That is according to figures recently published by the department which show that the controversial legislation has only yielded £12.1 million.

Original estimates claimed that the legislation would raise around £200 million, but the data, released under the Freedom of Information Act, has shown that just a fraction of that sum has been raised.

Covering the tax years 2000 to 2011, the report showed that just over 4,200 investigations were carried out.

The most-recent information showed that the last two years have seen 12 cases raise £155,502 in 2009-10 and £219,180 yielded from 23 investigations in 2010-11.

Contracting trade body PCG commented on the findings: "It was important that we establish all the facts surrounding the impact of IR35, from its inception in 2000 right up to the present day.

"Our members wanted to see the full picture, not just snap shots of particular years. Openness, fairness and transparency for freelancers is what PCG has been campaigning for since the inception of IR35."

Posted by Thomas Fletcher