Complex contractor status tests would prove unsuccessful as a replacement for IR35 legislation, according to one industry voice.
News provider Contract Calculator said there can be no scope for ambiguity when carrying out tests to determine an individual’s status.
Certainty is needed both by freelancers, to properly organise their tax affairs, and by HM Revenue & Customs to generate tax revenues, the website stated.
“Such tests simply can’t be applied to the 21st century’s highly-skilled knowledge workers for whom the concepts of ‘control’ and ‘substitution’ are an irrelevance,” Contract Calculator stated.
“On the other hand, simple tests are too transparent and likely to suffer from the ‘law of unintended consequences’, as has been the case in Australia.”
Either this, or unscrupulous individuals will identify ways of working around the law, the website added.
The Office of Tax Simplification has been charged with identifying ways of improving existing IR35 legislation, which has caused controversy among freelancers since being introduced in 1999.