IR35 status tool fails to quash contractors’ tax fears, says IPSE

A new online tool launched by HM Revenue & Customs (HMRC) to help contractors determine their tax status ahead of radical IR35 reforms has failed to quash the tax fears of those working in the public sector, according to the Association of Independent Professionals and the Self Employed (IPSE).

The comments come just weeks after HMRC launched its flagship Employment Status Service (ESS) tool ahead of its controversial IR35 reforms, which continue to attract widespread criticism.

The reforms, which will take effect early next month (6 April 2017), will shift compliance responsibility from independent contractors in the public sector to their employers, public bodies and recruitment agencies.

Numerous tax and contractor bodies have criticised the reforms, and IPSE has said that HMRC’s ESS tool, which claims to be able to determine contractors’ tax status ahead of time, is simply too little, too late.

An IPSE spokesperson said: “We asked members to provide us with feedback, and while some said it has been great, others said it did not determine their status, and at this stage does not have the full amount of information [required]”.