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Off-payroll Working: Prosecutions

Question for Treasury

UIN 181051, tabled on 14 April 2021

To ask the Chancellor of the Exchequer, how much revenue to the Exchequer has been raised in pursuing IR35 cases through tribunals and the courts in the most recent period for which figures are available.

Answered on

19 April 2021

The vast majority of employment status decisions, including decisions on the off-payroll working rules (commonly known as IR35), are straightforward and settled without the need to go to tribunal. However, a number are more finely balanced, generally because of their complexity or because there are unusual circumstances and it is not possible to reach agreement. It is right for HMRC to litigate these cases.

HMRC’s responsibilities are to secure the best practicable return for the Exchequer. Entering into, taking forward and resolving disputes contribute to meeting that objective. This requires consideration not only of the tax at stake in cases (i.e. a straightforward costs analysis) but also wider impacts, including potential tax liabilities of other taxpayers.

Since 2001, HMRC has taken 40 cases regarding the off-payroll working rules to the Tax Tribunal.

Work on off-payroll working rules cases is carried out by a number of HMRC teams. These teams are also involved in other cases and other litigation and as a result, HMRC do not hold specific information relating to the overall cost of pursuing cases (which is mitigated to some extent by HMRC’s recovery of costs in litigation which it wins).

HMRC’s approach to litigation generally is set out in their published Litigation and Settlement Strategy. Disputes are costly for both HMRC and individual taxpayers and HMRC are committed to supporting taxpayers to get their tax right without the need for a dispute.

Answered by

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