Spotlight : HMRC’s Employment Status and Intermediaries Forum

Originally established as the IR35 Forum following a commitment in the 2011 Budget to improve the administration of IR35, the group now operates under its broader name of HMRC’s Employment Status and Intermediaries (ES&I) Forum, to reflect its wider focus on employment status and intermediaries more generally.

Meetings typically include HMRC updates on perennial issues such as the off-payroll working rules, umbrella companies and managed service companies. Recently, they have explored how the various deeming provisions within the Income Tax (Earnings and Pensions) Act 2003 interact, developments relating to HMRC’s Check Employment Status for Tax (CEST) tool, and specific technical issues affecting both advisers and businesses navigating status determinations.

HMRC also welcomes stakeholder presentations to the group. Topics have included the elective deduction model (see tinyurl.com/52kt9nd5) and an IR35 ‘Green Card’ clearance facility proposal as a potential way to simplify off-payroll working rules. Members’ contributions, drawing on their knowledge of the complexities of the labour market, help to improve HMRC’s understanding and ensure practical challenges are reflected in how rules are explained, administered and, where necessary, refined.

Outputs

Members are occasionally invited to review draft guidance prior to publication, allowing our input to improve clarity and taxpayer understanding. This has included engagement around updates to HMRC’s Employment Status Manual following its success in the PGMOL case, and guidance connected with Spotlight 67 on managed service companies (see tinyurl.com/mrucy7em).

Administration

The ES&I Forum aims to meet quarterly. Meetings are either held remotely or in person at 100 Parliament Street. It is co-chaired by an external representative selected by members; the current co-chair is CIOT volunteer Sarah Hewson.

The forum’s terms of reference and agreed minutes are published on GOV.UK (see tinyurl.com/2ejstvu3).

Membership

Membership is drawn principally from representative and professional bodies, ensuring a broad range of perspectives from across the labour supply chain. Regular participants include CIOT and LITRG, the Association of Independent Professionals and the Self-Employed (IPSE), the Association of Professional Staffing Companies (APSCO), the Confederation of British Industry (CBI), the Freelancer and Contractor Services Association (FCSA) and the Institute of Chartered Accountants of Scotland (ICAS), alongside HMRC officials.

Status expert Rebecca Seeley Harris is ES&I’s newest member, representing the Employment Status Consultative Committee (ESCC). This is a group of employment tax experts recently established by Justine Riccomini (former co-chair of ES&I) to tackle issues within the employment status framework.

Why it matters

Contingent labour is very important to the economy, but employment status and intermediary arrangements remain areas of significant complexity and risk. Issues such as false self-employment and the use of disguised remuneration models affecting lower-paid agency workers continue to generate concern for LITRG and other stakeholders.

The ES&I Forum provides a structured channel for engagement at a senior level on these issues. It allows stakeholders to raise systemic concerns, seek clarity on HMRC’s approach to tackling non-compliance, and escalate practical issues on behalf of taxpayers – particularly those who may be unrepresented – such as the need for clear, accessible and tailored guidance.

For professional and representative bodies alike, the forum plays an important role in ensuring that experience from across the labour market informs HMRC’s approach to status and intermediaries.

Meredith McCammond [email protected]