IR35 and HMRC

HMRC IR35 investigation? Here’s what to do

Receiving an IR35 compliance check letter from HMRC can seem daunting, and professional guidance from an experienced IR35 defence expert is essential for quick and efficient resolution.

Before responding to HMRC, your business should engage an advisor with specialised experience in defending IR35 cases. As there is no “one-size-fits-all” solution, the IR35 expert should create a bespoke strategy based on your business’s unique situation and circumstances.

An expert will review HMRC's requests and discern which require urgent action, versus those that may be arbitrary. They should ensure your communications are grounded in case law and facts.

With the benefit of their expertise and depth of knowledge, you can demonstrate compliance, avoid unnecessary and excessive time costs, and aim to prevent further scrutiny.

More detail

HMRC is actively conducting compliance checks on business’s implementation of IR35 & off-payroll rules. Initial letters and questionnaires requesting details on contractor hiring, status assessment processes, and outsourcing arrangements are being sent out. HMRC is set to significantly increase compliance checks, with plans announced to hire 5,000 additional inspectors for this task.

It is prudent to engage experienced IR35 defence advisors right away to assist with responding to HMRC's inquiries. All correspondence pertaining to a compliance check could potentially end up as evidence in a future tax tribunal if the matter escalates. Specialist IR35 knowledge is crucial to laying the proper groundwork and foundations for a solid defence.

If HMRC views your responses and is satisfied that your systems and processes are robust, they will likely close the check and take no further action. However, if HMRC is not convinced of your firm's compliance, the check could lead to a lengthy appeals process that could drag on for years.

What should you do when you receive your compliance check:

  • If you are a client of IR35 Shield with the protection of our Tax Investigation Service, contact your account manager immediately
  • If you would like to protect your business now, please speak to an expert about our Tax Investigation Service
  • If you've received your letter, or are in the middle of a compliance check and require expert IR35 defence, get in touch about our IR35 defence services

To find out more about how we successfully defended our client with the minimum of fuss, read our article.

Powered by technology, protected by experts. The trusted partner for compliance-focused businesses. Total confidence with status tools, consultancy and IR35 defence.

Speak with an expert
NEW
IR35 Academy

IR35 training. Best practice for your business, easy for your team.

Failing to take reasonable care can result in 6 years backdated tax plus penalties. Our online training makes IR35 simple, educates your team and demonstrates your compliance to HMRC. Find out more