IR35 could impact senior contractors, warns Lawspeed

Jo Faragher

Recruitment law experts Lawspeed have warned that recent amendments to the IR35 tax legislation could leave contractors in a legal grey area.

HM Revenue and Customs (HMRC) published guidance earlier this month on the expansion of IR35, giving more detail on how it will affect so-called ‘office holders’.

Office holders, according to HMRC, are those in permanent positions that would “exist independent from the person who holds it and may be filled by successive holders” (for example, chief executives and finance directors). The planned amendments plan to extend the IR35 tax requirements to office holders engaged through third parties, which could have implications for contractors in senior roles.

According to Lawspeed, HMRC’s definition of office holder is too broad and could be interpreted to apply to almost any role, for example an interim director who has been brought in to turn the company around.

Lawspeed’s experts also point out that because the amended definitions have come from precedent case law, future tribunals could expand the scope of IR35 even further.