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<p>The vast majority of employment status decisions, including decisions on the off-payroll
working rules (commonly known as IR35), are straightforward and settled without the
need to go to tribunal. However, a number are more finely balanced, generally because
of their complexity or because there are unusual circumstances and it is not possible
to reach agreement. It is right for HMRC to litigate these cases.</p><p> </p><p>HMRC’s
responsibilities are to secure the best practicable return for the Exchequer. Entering
into, taking forward and resolving disputes contribute to meeting that objective.
This requires consideration not only of the tax at stake in cases (i.e. a straightforward
costs analysis) but also wider impacts, including potential tax liabilities of other
taxpayers.</p><p> </p><p>Since 2001, HMRC has taken 40 cases regarding the off-payroll
working rules to the Tax Tribunal.</p><p> </p><p>Work on off-payroll working rules
cases is carried out by a number of HMRC teams. These teams are also involved in other
cases and other litigation and as a result, HMRC do not hold specific information
relating to the overall cost of pursuing cases (which is mitigated to some extent
by HMRC’s recovery of costs in litigation which it wins).</p><p> </p><p>HMRC’s approach
to litigation generally is set out in their published Litigation and Settlement Strategy.
Disputes are costly for both HMRC and individual taxpayers and HMRC are committed
to supporting taxpayers to get their tax right without the need for a dispute.</p>
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