Worth the trouble?
The Professional Contractors Group is pressing the Government for details of the cost and efficiency of IR35 investigations carried out by HMRC after figures, provided by firms of accountants who deal with these cases, revealed a success rate of less than 1% for HMRC.
PCG chairman Simon Juden has written to the Paymaster General to the Treasury, Dawn Primarolo MP, asking whether the Government is planning to review the criteria for launching IR35 investigations. He says, 'We know that out of more than one thousand cases investigated, just three were found to be in breach of IR35 rules. This clearly raises several questions about the efficacy and cost to the taxpayer of such investigations'.
Dave Smith of Accountax shares the PCG's dismay and says 'Accountax is winning IR35 cases (without going to the Commissioners) left right and centre but it still tends to be after a long drawn out war of attrition at great cost to Crown and taxpayer'. He says that increasingly, 'the cases HMRC are willing to take to appeal (with the attendant publicity) are cases they know they have a high chance of winning, e.g. Netherlane, Future on Line, both cases which had few anti IR35 factors'. Mr Smith recommends that advisers 'get the facts, apply the law and stick to their guns' and doubts that IR35 has been cost effective for HMRC'.
www.pcg.co.uk
Civil partnerships
From 5 December 2005 same-sex couples, who are living together as partners, will be treated in exactly the same way as opposite sex couples, whether or not they have formed a civil partnership.
This means that if an individual making a new claim for tax credits on or after 5 December 2005 who is living with a civil partner, or with a same-sex partner as if in a civil partnership, must make a joint claim as a couple.
Someone already claiming tax credits as an individual but living with a same-sex partner as if in a civil partnership, must inform HMRC of the circumstances on 5 December 2005 or within three months of that date. When a couple forms a civil partnership in the future or starts to live as if they are civil partners, they must tell HMRC when they begin to live as a couple.
www.hmrc.gov.uk