One of the first hints of what to expect from the online status assessment tool, currently under development by HMRC to help workers, agencies and end users assess their IR35 status, has been revealed.

Writing in a post on LinkedIn, Chris James, head of accounting services at JSA Services Limited, said he was part of a group of people who were given a preview of the new tool, in its current ‘Alpha’ form.

While commending the HMRC representatives who led the preview event and saying that they ‘stood up well to the questioning from a reasonably negative room’, James was quick to point out that he did have some concerns about the tool.

“The tool still does ‘feel’ a lot like older versions of the same thing,” James writes. “These have mostly been consigned to history as not good enough to be widely useful. The problem here though seems to be HMRC’s brief rather than the team producing the tool.”

James revealed that the tool will not assess mutuality of obligation – a key element in determining employment status. The reason given by HMRC for this was a contract concerning the supply of services with consideration is sufficient proof of mutuality of obligation. This would be widely disagreed with by many members of the contractor community.

“Substitution is given something like an appropriate level of prominence, although there seems to be a lack of enthusiasm for accepting any kind of precedent, so that a question like ‘has a company providing similar services in a similar way ever sent a substitute?’ is replaced with something along the lines of ‘have you / your business ever sent a substitute, on this assignment?,” James explained. “Some of the questions therefore feel a bit less sophisticated than they need to be to establish the practice that is relevant to the issue being decided.”

While the version of the online status assessment tool previewed was certainly an early version, it does provide an insight into what to expect. The tool will not be mandatory however, and more details are expected over the coming months.

James did add that the team involved in the preview confirmed that the tool would be continuously improved once released.

Should you want some peace of mind, we offer a full contract review amongst other services to help you prepare for IR35. We’ll give a pass or fail based on the current contract you hold, along with comprehensive comments on how to improve any problem areas.

We also offer IR35 investigation insurance with representation from our Head of Tax and resident IR35 expert Andy Vessey ATT should it go to tribunal.

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