An appendix to a letter sent to MPs by the Association of Recruitment Consultancies provides a helpful overview of the issues still outstanding with the IR35 digital tool.
It uses a checklist approach for assessing employment status and this method has repeatedly been rejected by the law courts
There is evidence that the results from the tool conflict with decisions made in past authoritative legal cases
It allows for an ‘undecided’ outcome, so leaving hirers and agencies
confused with no further assistance to hand, and the contractor in limbo
There is evidence that it passes arrangements that on a proper analysis would fail, so actively permitting tax avoidance
Tax status and the tax that follows is decided by a piece of
technology that may not be correctly programmed; if a court concludes
that an outcome of the tool is incorrect the tool will require
reprogramming and all decisions based on the tool beforehand may be
There are no checks, balances or safeguards in place in respect of its
programming, which could be changed by HMRC without notice and without
There is no provision for appeal of a tool outcome or a decision based on the tool outcome
While HMRC current policy is to say that it will stand by the tool so
encouraging reliance upon it, it could at any time and without any
process amend that policy leaving exposed those who have relied on it.