IR35 forum minutes - customer segmentation model

[Contractor UK]

Just wondering what everyone thinks of this customer segmentation idea, as covered in today's article on HMRC's IR35 forum minutes on customer segmentation, as a way forward for identifying 'high' and 'low' risk IR35 contracts?

HMRC say they won't publish 'detailed risk criteria' but are aiming to issue guidance that will make their selection criteria (for which cases to review) more 'transparent' and enable contractors to ascertain where their contracts fall within the spectrum.

HMRC says:

There was a discussion about whether there should be greater transparency about HMRC's criteria for risk assessment, and how it selected cases for IR35 reviews. HMRC said it was not possible to publish its detailed risk criteria, but it agreed that providing greater transparency about the process might provide greater reassurance to those fearful of being subject to review on a purely random basis. This was precisely why HMRC believed that customer segmentation was the best way for reforming the administration of IR35; it would enable individuals to identify whether HMRC considered them to be low, medium or high risk.

How does everyone see this panning out? Could it tackle the 'mistrust, inefficiency and inconsistency' criticisms leveled at the taxman over their handling of IR35 so far?

HM Revenue & Customs: IR35 Forum - Minutes

Curious to know everyone's thoughts?

[Fred Bloggs]

Is this a backdoor way towards introducing the Aussie style 80% rule? It effectively closes down contracting and makes everyone PAYE.

[SueEllen]

Sounds like bulltulip on HMRC being more accountable and open.

[Fred Bloggs]

Sounds like bulltulip on HMRC being more accountable and open.

Agreed.

[Jog On]

From what I read it looks like 'self assessment IR35 status'

[Sockpuppet]

I don't think its anything that we don't already know.

If your SIC code says you a plumber they're unlikely to want to see if your operating within IR35 but instead to see if your doing cash in hand jobs.

If your SIC code says your an IT programmer then they're going to want to see that your IR35 status.


Also if you invoice <50k per year probably not worth an investigation. If you're >£300k a year also not worth one. etc