IR35 information could lead to non-compliance

A Government Minister has refused to reveal the extent of HMRC's IR35 investigations on the basis that it might lead to 'non-compliance with the legislation'.

Last month, Terry Rooney Labour MP for Bradford North asked a written question to the Treasury about how many investigations concerning IR35 were launched in each of the last five years; and how many of them resulted in (a) prosecution, (b) an increase in tax due and (c) no further action.

Treasury Minister, Kitty Ussher, replied:" The intermediaries legislation, commonly known as 'IR35', was introduced with effect from 6 April 2000 to counter the avoidance of employed levels of tax and national insurance by individuals providing their services through intermediaries.

"Disclosure of HM Revenue and Customs' compliance data relating to the legislation would result in a risk of non-compliance with the legislation. Accordingly I am not able to provide the data requested."

Usually, Ministers can refuse to answer MPs' questions if the cost of preparing the data is too great. But her answer seems to be implying that by revealing the information, people might be encouraged to ignore the legislation.

Freelancer group, the Professional Contractors Group (PCG) recently used the Freedom of Information Act to discover that IR35 brought in only £1.5 million a year.

Editor's note: Kitty Ussher resigned two days after answering this question after it was revealed she avoided paying up to £17,000 in tax on the sale of her second home.