In the House of Commons during topical questions to the Chancellor of the Exchequer, David Davis, MP for Haltemprice and Howden), called for the abolition of IR35, in light of the HMRC “bullying” of TV presenter Kaye Adams.
Davis said that even though Adams had won her first tribunal nine years ago, HMRC has taken her to court four times, forcing her to spend a whopping £200,000 in legal fees.
The initial tax bill was just £70,000, Davis said that this is a “disgrace” by HMRC as it has gone on for far too long.
Davis told MPs in the House of Commons, “A fortnight ago Kaye Adams, a TV presenter, won her case again HMRC on IR35 status.
“Despite the fact she won her first tribunal on this over 9 years ago, the HMRC took her to tribunal or court, four times, forcing her to spend £200,000 in legal fees. HMRC spent many times that using two Kings Counsels at the last hearing alone.
“This was over a net tax bill for £70,000. There is no conceivable economic case for this but what HMRC is trying to do is move the guidelines by coercing Ms Adams using her as an example to intimidate other self-employed workers to give into HMRC’s bullying.
“This is a disgrace. It’s gone on for too long, the 2021 revisions were inadequate and Ministerial oversights too weak.
“When is the Government going to review IR35 and ideally abolish it?”
Financial Secretary of the Treasury, Nigel Huddleston MP, FST said, “It is our duty to ensure everyone pays the right tax under the law regardless of wealth or status.
“We do note that the decision of the tribunal and we will carefully analyse this outcome before considering next steps.
“But, the Off-payroll rules ensure that people who work like employees but through their own limited company are taxed like employees, creating a level playing field for other workers.”
Dave Chaplin, CEO of tax compliance firm IR35 Shield said, “Mr Davis is right about the manner in which HMRC has been conducting themselves in these types of cases, and Kaye Adams is simply the first person to speak out finally. Many others have cracked under pressure and ended up paying monies to HMRC, which, if a judge had examined the case, may have been ruled never due in law.
“The Financial Secretary of the Treasury, Nigel Huddleston, has repeated the same old tired Treasury rhetoric that everyone has to pay the correct amount of tax ‘under the law.’ Ironic, considering that HMRC has repeatedly ignored the law in the case of Ms Adams.
“Mr Huddleston further asserts that there should be a ‘level playing field ‘ between employees and those who ‘work like employees’ but through their own limited company. In which case, if they are to be taxed the same, should they not also receive the same rights and benefits ? Or, is the Treasury’s real agenda to create a new status of Zero-Rights Employment?”