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Guidance on IR35 and the term Office Holders

Guidance on IR35 and the term & lsquo;Office Holders’

HM Revenue and Customs (HMRC) has published guidance on how the forthcoming amendment to the IR35 legislation will be implemented, in respect of & lsquo;office holders’.

Legal experts, Lawspeed, have argued that the HMRC definition “a position which has an existence independent of the person who holds it and may be filled by successive holders” is too broad and could well be interpreted to apply to almost any role.

The HMRC explanatory notes point to precedent case law arguing that this provides strict limits as to the application of the new IR35 legislation.

Exactly where this leaves those contractors who do fulfil roles that could be regarded as an & lsquo;office’, (e.g. interim directors brought in to turn a company round) remains to be seen. On the face of it, the notes can be seen as ambiguous.

Despite Treasury claims that the move was merely to bring income tax legislation into line with the position under social security law, the change will invariably affect a proportion of contractors in senior roles, in particular the interim market.

Furthermore whilst the HMRC guidance reflects the policy that the Revenue would be expected to take, there remain two flaws with this position firstly policy can always be changed more easily than legislation so that the new provisions could always be applied far more broadly secondly the reliance on definitions born out of precedent case law indicates that future tribunals have it in their power to expand the scope of the provision depending on the facts of a case meaning contractors have little certainty.

This is one of those grey areas of the law and so the right legal advice is essential.

Since 2001 Lawspeed has provided advice, contract reviews and template contract terms to help contractors, freelancers, interims and recruitment consultancies to understand and manage their IR35 responsibilities.


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