Recruitment Grapevine - 'Suspicious' HS2 IR35 results hint at non-compliance

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A leading IR35 campaigner has said that the status assessments of HS2 contractors is suspicious and hints at non-compliance.

Requests for information, submitted in Freedom of Information (FOI) request form by contracting authority ContractorCalculator, found that 98% of HS2 contractors are deemed to be caught by IR35.

It has lead Dave Chaplin, CEO and Founder of ContractorCalculator, to question the accuracy of the tool used to assess IR35 status and question whether rulings are being done fairly or compliantly.

He said: “The proportion of contractors deemed within scope of the rules by the BBC, Network Rail and HS2 are 92%, 99% and 98% respectively. These numbers are shocking enough.

"Yet, despite the overwhelming conflicting evidence, HMRC stands firm in its confidence in CEST’s [self-assessment tool] accuracy."

“Compliance practices aside, the 98% of contractors considered caught by IR35 in 2018 alone is enough to warrant suspicion. The number is wildly inconsistent with HMRC’s estimation that roughly a third of contractors should find themselves caught by the rules, yet strikingly similar to the rough proportion of ‘inside IR35’ outcomes found by other public bodies using CEST.”

According to Chaplin, Network Rail finding 99% of contractors to be caught by IR35 reveals the use of an unlawful ‘blanket’ approach to IR35 assessments – whereby all contractors are given the same IR35 status to mitigate against potential problems.

He added these rulings are terrible for the self-employed.

“This appalling treatment of the self-employed has backfired for Government. Rates to obtain talent have soared, while the ability to source talent has diminished, causing considerable costs to projects such as HS2.

“The Off-Payroll rules have been an act of self-harm on the public sector, yet Government seems intent on inflicting the same wounds on the private sector.

“Government needs to delay its proposed extension for at least one more year while independent data gathering is conducted and recognise the hard truths about Off-Payroll that HMRC has so far refused to acknowledge.”