`The Chartered Institute of Payroll Professionals
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Compliance News
HMRC win appealed IR35 case worth £140,000 Published: 28 April 2022 Emailed: 4 May 2022
Her Majesty’s Revenue and Customs (HMRC) have emerged from the Court of Appeals having the appeal against them dismissed on 26 April 2022.
Lee Hawksbee, a presenter for TalkSport Radio, lost the appeal which relates to the tax years 2012/13 to 2014/15 and is worth over £140,000 in tax and national insurance. The First Tier Tribunal (FTT) found in favour of Hawksbee, HMRC appealed and this was upheld in the Upper Tribunal (UT). Hawksbee was allowed to appeal and did so, however when looking at factor such as mutuality of obligation, the Court of Appeals (CoA) concluded that the decision made by the upper tribunal was correct. The judgement details the reasonings behind the decision. On the same day the CoA have referred another IR35 case back to the UT after finding that the rules around IR35 were not applied correctly. Kaye Adams, a freelancer engaging with the BBC, had her case appealed by HMRC after she succeeded in the FTT and UT. The COA saw issues with the ‘hypothetical contracts’ between Adams and the BBC. Of note in the judgement ; Sir David Richards, a CoA judge, remarked that “ it would certainly be desirable if, there were one clear test or approach to determining whether a person was an employee. Important legal consequences flow from this determination. ” The use and efficacy of the Check Employment Status for Tax (CEST) tool has always been a controversial subject for payroll professionals when discussing off-payroll working and its application. With the tool taking into consideration many factors and past case law, it is far from a simple test. The introduction of one clear test could reduce the number of expensive and lengthy legal battles HMRC has recently been involved in.
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HMRC SEISS compliance activity update Published: 29 April 2022 Emailed: 4 May 2022
Her Majesty’s Revenue and Customs (HMRC) has confirmed there will be a new strand of compliance activity relating to self-employment income support scheme (SEISS) grants.
Where a customer’s tax return for any of the years from 2016/17 to 2019/20 is amended on or after 3 March 2021, meaning they’re n o longer entitled to the amount they originally claimed for their fourth or fifth (or both) SEISS grants, they need to repay any overpayment to HMRC. Where there has been an overpayment on the fifth SEISS grant, HMRC will also compare the reference year (2018/19 or 2019/20) turnover figure they entered when claiming the grant to the turnover figure included on their latest tax return. Where there are discrepancies which mean the individual received an 80% grant when they were only entitled to a 30% grant, they’ll need to repay the difference.
HMRC is in the process of contacting some of those whose entitlement to the grants has reduced by more than £100, to ask them to repay the overpaid amount. Circulation of assessments and explanatory letters began on 22 April 2022.
HMRC has also advised that, although it won’t be raising assessments to recover overpaid grants of £100 or less, the voluntary repayment service can be used for individuals wishing to repay these amounts. Information is available online.
Anyone who is struggling financially can contact HMRC to discuss a payment plan by calling the Self-Assessment helpline on 0300 200 3822.
cipp.org.uk
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