Fears grow as IR35 deadline looms

The Inland Revenue is expected to know this week how many contractors have made their first payments under the new IR35 regulations, amid fears that many will fail to meet the deadline.

Contractors subject to IR35 were to make tax returns by 5 April and their first tax payment is due on 19 April. But there are fears that many contractors have "stuck their heads in the sand" after becoming convinced that they were not subject to the controversial tax measure.

Efforts by the Professional Contractors Group to overturn IR35 in the High Court ended in failure two weeks ago when a judge said he could not rule that the legislation contravened the Human Rights Act.

Despite bitter disappointment, campaigners believed that criticisms in the ruling would lead to new guidance from the Revenue.

However, the Revenue insists that IR35 stands, and that no new guidance is to be issued. Since then it is believed that some contractors have been waiting for guidance that will not come and will therefore miss the deadline.

Rodney Taylor, chairman of the London Society of Chartered Accountants' tax committee, warned: "There are those who have put their heads in the sand and others who think IR35 doesn't affect them."

Also published on accountancyage.co.uk