IR35 Services
Being prepared is half the battle
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IR35 for your Limited Company
IR35 can affect any individual contracting via their own limited company. It is therefore imperative that contractors, and their accountants, are receiving the correct advice to ensure risks in this area are mitigated and the contractor has a robust defence should HMRC challenge the IR35 status.
As a contractor, ensuring you have carried out your due diligence in this area can mitigate your personal and commercial exposure; in respect of the latter reducing the risk of you losing or missing out on a contract.
In recent years, particularly for contractors engaged via agencies, there has been an increased requirement for contractors to satisfy agencies, and their clients, that they are either applying the deemed payment (applicable if it is determined the relationship between the individual and the client would be one of employment), or providing evidence why they considered they are outside of IR35. Failure to provide satisfactory evidence can, and has, resulted in the loss of work for contractors.
The risks to a contractor of not carrying out the necessary due diligence in this area are therefore not only tax related, but commercial too.
Are you an Accountant?
IR35 for Accountants
Do you require assistance with contract reviews, a client’s IR35 enquiry, or simply have queries relating to IR35? Find our more about IR35 Accountant support.
Public Sector Contractors
With the recent changes to IR35 in the public sector it is even more important for contractors and their accountants to understand IR35, what it means for them and what their options are.
From 6 April 2017, for contractors providing services in the public sector, it is the end client/agency who determines whether an engagement falls within IR35 rather than the contractors.
This change represents a significant administration burden on the end client/agency. As such we have seen many entities engaging contractors adopting an ‘all within IR35’ approach.
Such an approach is not believed to be sustainable in the long run with consequences, for example: being contractors seeking work outside of the public sector, leaving the public sector with a shortage of skilled contractors; or contractors demanding higher fees to compensate for the reduction in take home pay.
Despite the fact the final decision in respect of IR35 status has been taken out of the contractors’ hands, we believe it remains important for contractors to assess their IR35 status. Having written contracts reviewed for IR35, or ensuring there is a written contract in place setting out the agreed terms and conditions, should still be an essential piece of due diligence undertaken by the contractor.
There are several reasons for this, not least, because an IR35 contract review undertaken by an expert could be the evidence an end client/agency needs to change its view. Indeed, HMRC’s guidance states that one of the contractors’ obligations is to assist the end client/agency to determine its IR35 status.
Other reasons for contractors continuing to undertake due diligence are:
(1) if you are working on a contract with a client pre-6 April 2017 and either that contract continues beyond that date, or you enter into a new contract with the same end client who treats you as within IR35, there is a potential risk of HMRC opening an IR35 enquiry into the contractor’s company for the period prior to 6 April 2017. Under normal time limits HMRC can look back four years. As such the potential liability for your company can be significant. By having the written contract reviewed now, you can assess/mitigate your risk;
(2) The legislation that came into effect on 6 April 2017, also gives the contractor the right to make a ‘repayment claim’ to HMRC if they believe they have been taxed incorrectly. This is a far cry from the ‘appeal’ that was alluded to in the consultation document, and should not be contemplated without expert advice given the potential risks, however, having an expert undertake an IR35 review may assist in a favourable outcome if this is an avenue you wish to pursue.
Our services
Whether you require an IR35 contract review or contract drafting, or you would like assistance with an HMRC enquiry our experts can provide you with the support you need.
We have extensive experience in dealing with HMRC enquiries from start to finish: corresponding with HMRC, to Statutory Review, Alternative Dispute resolution (ADR) and representation in the Tax Tribunals. Meaning you will not need to be referred to another third party should the enquiry reach these stages.
We work on fixed fees so that you have certainty of the costs involved at each stage.
Find out how we can help your business
Should you require more information about our services, or have a particular tax query you are seeking advice on, get in touch today! Simply fill in the form below and a member of our team will be in touch.
Alternatively, give us a call 01296 488810.
