IR35 decisions 'take too long'

The Inland Revenue has admitted the average time it takes to decide on an individual's IR35 status is too long, but claims it's the contractors themselves who are to blame for the hold-ups.

In a meeting of the Corporate Tax Operational Consultative Committee, between the Inland Revenue and the industry, the Revenue acknowledged that the five to 12 months it currently takes to make up its mind should be shortened, while it could have just 14 days in practice to decide whether their clients are subject to the legislation.

Although the Inland Revenue highlighted that tax affairs could be reviewed at any point in the year, so the 14-day limit wasn't "the whole picture", it said that it would review how long its officers were taking to settle on a decision, saying 12 months was too long and that it would investigate whether the delays were the result of staff or technical issues.

Andrew Scrivens, a tax consultant at IRPC Taxation Services, said that he is working on a case that so far taken two years and is still yet to be resolved.

Scrivens said in a statement that the delays weren't entirely the fault of the Inland Revenue, who are floundering under the weight of more and more work being foisted on them by the Treasury without having any more staff.

"They [the Inland Revenue] are calling in more cases but don’t have anywhere enough trained staff to cope with the workload... There does seem to be a lack of staff with the Inland Revenue who are trained to act within this area," he said. "We are pleased to see that the Revenue is taking this seriously but the nature of the job means that we shouldn’t expect an improvement in the near future. It is such a complicated area of law that the length of time taken to train Inland Revenue staff in this area means there is unlikely to be an improvement in the short term."

But an Inland Revenue spokesman dismissed the claims, and said delays are usually the result of people under investigation not supplying the right information quickly, and that investigations themselves could be shortened if the companies coughed up the facts on time.

The Inland Revenue offers a free contract-opinion service which offers advice on whether IR35 legislation applies to a particular job. The service takes up to 28 days to pass an opinion if the taxman has all the right information to hand.