IR35 - how many investigations per year?

[Goggy]

I'm a bit confused, as can see different figures in different sources on how many ir35 investigations per year Rev&Cust carry out.
If to look at IR35 Insurance.co.uk | IR35 Accountant and Insurance Advice it's said "Annually, HMRC executes approximately 1,000 investigations into personal service companies ."
Maybe they count all investigations, not only ir35?

If to have a look at
IR35: Just 322 investigations in five years - Legal advice from Freelance Advisor
there are 12-150 a year. Do they count all cases or only the ones that were sent to court?

Yes, this information they try not to publish, but maybe someone came across some other sources that can give an idea on the amount of investigations per year?

[craig1]

It's not in HMRC's interests to understate the number of investigations they do but it certainly is in an insurance company's interests to find ways to state the maximum number possible using the facts at hand. BUY OUR INSURANCE OR THE WORLD WILL END!

[v8gaz]

I suspect that the pitifully small numbers for recent years (22 last year) refer to successful investigations, not all investigations started.. As any PCG member knows, there's very little chance of getting caught if you follow a few simple rules.

[craig1]

I suspect that the pitifully small numbers for recent years (22 last year) refer to successful investigations, not all investigations started.. As any PCG member knows, there's very little chance of getting caught if you follow a few simple rules.

I'm not sure on that. If it is then the average extra revenue per successful case over the years is about £10k, almost pitiful recovery compared to what an average professional contracting saves when avoiding IR35. The way I read the figures was that it was total investigations.

[Contractor UK]

Couple of article links

There's a bit more information here on the number of IR35 investigations and yesterday's update gives Kate Cottrell's take on why IR35 remains a deterrent - and it's this, rather than the investigation numbers, that she believes means IR35 is here to stay.

[malvolio]

There's a bit more information here on the number of IR35 investigations and yesterday's update gives Kate Cottrell's take on why IR35 remains a deterrent - and it's this, rather than the investigation numbers, that she believes means IR35 is here to stay.

Hmmm....

I won't even begin to deconstruct the flaws in that article, but it's possibly worth remembering what Bauer and Cotterell do for a living.

[Kate Cottrell]

Malvolio to deconstruct please?

Hmmm....

I won't even begin to deconstruct the flaws in that article, but it's possibly worth remembering what Bauer and Cotterell do for a living.

Dear Malvolio

As always I am happy to respond to your contentions so please begin your deconstruction and allow me to reply.
Kate Cottrell

[malvolio]

Dear Malvolio

As always I am happy to respond to your contentions so please begin your deconstruction and allow me to reply.
Kate Cottrell

I'm on client site so don't have time for a full analysis, but just as a flavour:

If your business is as an independent freelance and a Limited Company is the most efficient way to manage it, why not incoorporate? People largely use umbrellas out of fear of IR35 as you say, but it is absolutely wrong to infer from that that what they pay now is the right amount and by moving to a Ltd Co they are somehow defrauding the governement of its rightful income.

IR35 is and remains a badly thought out, unjustifiable, vindicitive and unsupportable piece of legislation. A far better solution is to remove S44-47 ITEPA 2003 anyway and trasnfer the tax liability to the worker, but if we are to have an IR35 at all, let's be very clear that it should be (a) clearly targetted and (b) appropriate.

Hanging on to rubbish legislation simply for convenience is a toal cop out.

[Kate Cottrell]

Firstly I look forward to your full analysis. Secondly I have never said that "people largly use umbrellas out of fear of IR35" as this is simply not true. You seem to forget all those people that just want to work and have no choice but to operate through an umbrella or those that make a positive choice to work through an umbrella. Thirdly it is you that is suggesting those moving out of umbrellas into limited companies are somehow defrauding the government - not me. You must appreciate that there are people who do not see themselves as busnesses or independent freelancers so there cannot be this one size fits all approach. Removal of S44-47 ITEPA 2003 only affects those operating through agencies. There is another argument that asks why would a genuine business want to work for an agency? You simply have to see the bigger picture.

[JamJarST]

Firstly I look forward to your full analysis. Secondly I have never said that "people largly use umbrellas out of fear of IR35" as this is simply not true. You seem to forget all those people that just want to work and have no choice but to operate through an umbrella or those that make a positive choice to work through an umbrella. Thirdly it is you that is suggesting those moving out of umbrellas into limited companies are somehow defrauding the government - not me. You must appreciate that there are people who do not see themselves as busnesses or independent freelancers so there cannot be this one size fits all approach. Removal of S44-47 ITEPA 2003 only affects those operating through agencies. There is another argument that asks why would a genuine business want to work for an agency? You simply have to see the bigger picture.

I can name 3 without even thinking hard.

1. The agent has the business contacts to help me find the contract and is a preferred supplier
2. I use the agency to factor my debtors
3. I can get insurance for agency default but not client co default