Evidence of incorrect HMRC advice for contractors

The trade body and association of umbrella companies “PRISM” has discovered recently that, in some cases, HMRC advice to workers has been provided incorrectly by call centres. The evidence indicates that HMRC have been explaining to some workers that they were incorrectly entitled to claim a range of expenses such as travel and subsistence (T&S). This is clearly wrong due to the fact that these individuals were all subject to supervision, direction and control (SDC) and IR35.

Evidence of incorrect HMRC advice for contractors


It has been revealed that the CEO of PRISM, Crawford Temple, has had a range of recent conversations with different providers and has been informed that “at least a dozen” cases of HMRC advice were incorrect in the last month. A recent example linked to these cases involved independent professionals contracting in public sector bodies through their own limited companies.

The new IR35 legislation which came into force from April 2017 has been accused of creating increased market confusion and turbulence. Mr Temple from PRISM commented “This is more evidence, if any were needed, that the whole system of tax and employment legislation is too complicated for people to understand. If those within HMRC are giving the wrong advice because it is not clear, what chance does a contractor have who just wants to carry out sensible financial planning and get on with the job?”

In an official response to the PRISM findings a HMRC spokesperson commented that "Rules for travel and subsistence expenses for workers engaged through employment intermediaries were introduced from 6 April 2016. The rules put people who work through intermediaries such as agencies and ‘own companies’ in the same position as other employees. Our frontline staffs have guidance about the changes."

PRISM have additionally sponsored the Social Market Foundation (a public policy think tank) to undertake an independent review of tax and employment legislation, which is expected to be completed soon. 

Source: Recruiter (http://www.recruiter.co.uk) May 4th 2017 - HMRC call centres giving wrong advice to contractors, claims PRISM.

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