IPSE on Wednesday cautioned that recent letters sent to contractors at UK pharmaceutical firm GlaxoSmithKline by HM Revenue and Customs — warning the contractors they are considered to be working inside IR35 — is an example of the confusion that will happen when IR35 rules are expanded.

“These letters are yet another example of the chaos caused by IR35. And this confusion is only set to get worse when the changes to IR35 are extended to the private sector next April,” said Alasdair Hutchison, policy development manager at IPSE, the Association of Independent Professionals and the Self-Employed.

“The government urgently needs to pause and rethink this damaging legislation before it’s too late,” Hutchison said. “The self-employed are one of the most productive and dynamic sectors of the UK economy. Instead of stifling freelancers with clumsy legislation, the government must develop a modern tax system that works for them — not a telegraph-era system in a digital age.”

GlaxoSmithKline’s 1,500 contractors who received the letter were given until 19 September to agree with the HMRC’s assessment and make a payment or to disagree and give reasons.

Fiona Coombe, SIA's Director of Legal and Regulatory Research commented "It does seem that HMRC are stepping up their enforcement efforts and putting pressure on contractors in the private sector to review their working arrangements ahead of the proposed changes to the IR35 Off-Payroll Working Rules next year."