Government ignoring industry concerns over IR35 tool

(2 minutes to read)

The IPSE say that the government is continuing to ignore industry concerns that its online IR35 status tool is flawed.

An ongoing topic, the IR35 employment status tool is facing further criticism, with the Association of Independent Professionals and the Self-Employed (IPSE) accusing the government of failing to address concerns.

Earlier in the year, HMRC circulated to the IR35 Forum, a draft position paper setting out its position on one of the key tests of an employment relationship, mutuality of obligation.

Concerns had previously been raised in the Forum, and by experts, that the online CEST tool was flawed because it did not test for mutuality of obligation.

Recently, HMRC publicly released their updated position, which has not addressed the concerns raised, or recent tribunal decisions.

IPSE’s Director of Policy and Public Affairs Simon McVicker, commented, “It is extremely disappointing that HMRC’s paper remains unchanged from an earlier draft first shown to the IR35 Forum in March.

“They have completely failed to engage with arguments put forward by IPSE and other experts that their position on mutuality of obligation – that it is always present in any contract – is fundamentally flawed.

“This isn’t just IPSE’s view, it is also the court’s view, as was set out in our letter to HMRC.

Want a Free IR35 contract review?

Request one now

Give me my review

“Since then, two more tribunal cases have come to light which directly undermine HMRC’s position. These two cases make it clear that something more than simply pay for work performed is required to establish the necessary mutuality of obligation for an employment relationship.

“This is a crucial point because the CEST tool, which HMRC encourage clients and individuals to use to determine IR35 status, doesn’t consider mutuality of obligation at all.”

McVicker added, “It is totally unacceptable for the Government to ask people to use a tool which is so out of step with the latest tribunal decisions. The failure of the HMRC paper to even acknowledge those tribunals suggests they have their heads in the sand.

“There are potentially thousands of genuinely self-employed who have used the tool and been miscategorised as being inside IR35.

“This problem will become even more acute if the Government rolls out the IR35 changes to the private sector, where the sheer variety and complexity of engagements inevitably means that mutuality of obligation cannot be said to exist in every case.

“How can the government, in good conscience, even consider extending the ill-judged IR35 changes to the private sector without fixing fundamental problems with the CEST tool?”

To find out more about contracting please contact Jaime on 01442 795 100 or email

Why Dolan Accountancy?

Dolan Accountancy was set up by Simon J Dolan, the man behind the well-known brand SJD Accountancy. With over 25 years experience in the contracting marketing, Dolan Accountancy has the heritage, reputation and credibility you can trust. Working closely with our sister company, ContractorUmbrella, it means we can offer one low cost, fixed fee package at £95 + VAT per month. This gives you the flexibility of using both our Limited Company Accountancy Services and our award winning Umbrella Service, for one inclusive cost. We don’t believe in tiered packages or hidden extra fees, instead we aim to give you everything you need, including:

  • Free Company Formation – This is where it all begins. Once you have decided on an available name, we will form your company free of charge (if using our accountancy services) and it will be ready for you to use in as little as three hours.
  • Free use of ContractorUmbrella – With changes in Public Sector IR35 Legislation we understand that sometimes you are required to contract via an umbrella company. We will keep your limited company ticking over, while you work margin free via our sister company, ContractorUmbrella.
  • A Dedicated Accountant – Your accountant will be there for any company or personal tax advice that you require. We will never outsource work, even to internal teams.
  • Free Access to FreeAgent – The founder behind the multi award winning FreeAgent platform was one of Simon’s first clients, therefore it only seems fitting that we offer all of our clients access to FreeAgent, free of charge.
  • Free Business Banking – We have decided to waive our commission so our clients can use Tide free of charge for the first year.
  • Unlimited IR35 Status Reviews – We will review all of your contracts for IR35 purposes and provide you with our professional opinion as to its status.
  • Free Registered and Director’s Service Office Address – Sometimes you just don’t want your home address on display at Companies House. When you sign up to our accountancy services, we will offer the use of our address as an alternative.
  • Your Business and Personal Taxation Needs – This includes Company Accounts, Director’s Personal Tax Return, VAT Returns, Payroll, Corporation Tax and Dividend advice, to name just a few.

If you’d like to find out more about how Dolan Accountancy can help you and your business, please give us a call on 01442 795100 or email or