HMRC Likely to Target IR35 Status of Single Director Companies

The recent scandal over the 2,000 public sector officials who were being paid through personal service companies to avoid paying tax is likely to instigate a response by the HMRC. This is not the first scandal involving public sector officials. Back in January 2012, Ken Livingston was accused of tax evasion by channelling funds through a personal company to pay corporation tax rather than income tax and hence reduce his tax bill. Ken states that the funds were used to pay members of staff. Whether this was true or not the damage has already been done in the form of reduced voter confidence which affected his campaign for the mayoral election. 

There are concerns in the accountancy industry over a possible reactionary response by the HMRC to target single director companies and challenge their IR35 status. Readers would be advised to confirm that they have their contracts of service in order and have reviewed their IR35 status. For any specific IR35 queries, please feel free to contact one of our accountants at IR35@Belsizeaccountancy.co.uk.