At Qdos, we have dealt with over 1,300 IR35 cases, and are currently receiving an average of three new IR35 investigations per week which we handle on behalf of our clients. Our in-house team is made up of ex-HMRC inspectors and status specialists, making us one of the leading authorities on IR35.
When handling an IR35 enquiry, whether it is at the opening stages of an investigation or the conclusion, our initial advice is always the same; gather your evidence.
“Evidence is vital and it is very important that you prove that you have taken the due diligence in determining your position from the outset.”
In the past, HMRC’s attitude to IR35 was unpredictable, and the amount of cases opened fell dramatically. In recent years however, as a result of a much-publicised ‘crackdown’ on tax avoidance, HMRC significantly increased their IR35-related activity and the number of enquiries rose sharply. The recent upturn in enquiries is something that we have been experiencing, and the past few months have seen an influx of new investigations.
As many will already know, the onset of an IR35 investigation isn’t always obvious and a contractor may not even realise that they are under enquiry until it is too late.
*Tip* Most of the clients that we have been dealing with have received initial communication in the form of a seemingly unthreatening letter from HMRC. If you have received any recent correspondence from HMRC that eludes to, or directly asks questions about IR35, then we advise that you contact us immediately for a consultation with our consultancy team.
Regardless of whether or not you suspect that you yourself are currently under HMRC’s radar, for any contractor who wants to create a good case for themselves from the beginning, gathering evidence can be a significantly effective way of proving that you are indeed a business in your own account, and don’t fall under the category of a ‘disguised employee’.
Evidence in this respect is any form of professional indication or data that suggest or confirms that neither you nor your working practises mirror that of an employee. We recently published a list of examples of evidence that a contractor can compile to self-satisfy their working status in our ‘IR35 Survival Kit’.
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