HMRC has clarified its principles for businesses and individuals to comply with IR35 as we move towards the start of a new tax year.

The announcement outlines exactly how those who are affected by IR35 will be helped by HMRC to comply with it, and what steps the authority will take to intervene if it needs to. Initially, IR35 was due to start at the beginning of the last tax year, on 6th April 2020, but HMRC opted to postpone it until the same date this year to relieve the pressure on individuals and companies following the pandemic.

The principles it has laid out include a guarantee that it will help those who are attempting to follow the new rules; a commitment to assisting people to meet new IR35 responsibilities; a guarantee that all mistakes – whether by HMRC or customers – will be fixed; a promise that those refusing to comply will be confronted; and a commitment to addressing schemes for tax avoidance that attempt to get around the rule changes.

HMRC has also confirmed that errors will not be punished with fines for the initial 12 months, but some observers are arguing that these principles are harsher than the tax department promised in the wake of the COVID-19 pandemic.

Seb Maley, the CEO of Qdos, has also pointed out that the Check Employment Status for Tax (CEST) tool provided by HMRC remains unreliable. Many of those impacted may feel using accountants in Doncaster or wherever they live will be the best way to avoid problems.