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General working conditions and arrangements:
As we mentioned at the end of the previous page, the Inspector may attempt to approach the contractor's customer directly without consulting the contractor. They may do this in writing or they may try to do it in a meeting.
The dialogue between the Inspector and the contractor's customer will revolve around simple daily arrangements which are not specified in the contract. The Inspector is likely to try to establish that the arrangements do not support the contractor's view that he is a self employed business person providing a service.
A contractor with a good contract (and who has placed his faith in his contract for IR35 purposes) may therefore be wrong footed during an investigation when he learns the Inspector has already spoken to his customer about the daily working arrangements!
He may be even more amazed when he discovers that his customer's view of the arrangements as expressed to the Inspector are significantly at variance with his own view. It is more common than you might imagine for the contractor's customer to describe the arrangements in such a way that supports the Inspector's view that IR35 should be applied. After all, your case will not be as important to your customer as it is to you - and your customer probably will not take a professional advisor with him when he meets the Inspector!
To find out how you can avoid this "curved ball", visit our section headed "How to beat IR35".
General:
HMRC investigations can be very demanding for the tax-payer concerned both intellectually and emotionally. IR35 investigations are certainly so. They typically last for around 13 months and can be VERY stressful - after all, the amount of tax at stake can often be quite sizeable.
Prevention is better than cure - so try to make sure your contract is good and your working arrangements are clarified (see the relevant sections of our website). We would also recommend you buying an insurance policy to cover you for the professional costs of defending an IR35 investigation. This will allow you to appoint the very best advisor you can.
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Full index of pages:
Home Page IR35 Background - page 1 IR35 Background - page 2 IR35 Background - page 3
IR35 Rules - page 1 IR35 Rules - page 2 Beat IR35 - page 1 Beat IR35 - page 2
Beat IR35 - page 3 Beat IR35 - page 4 Ltd Company - page 1 Ltd Company - page 2
Ltd Company - page 3 Ltd Company - page 4 Umbrella Companies - page 1
Umbrella Companies - page 2 Composite Companies - page 1 Composite Companies - page 2
Composite Co - page 3 Composite Co - page 4 MSC - page 1 MSC - page 2 IR35 Insurance
IR35 Investigations - page 1 IR35 Investigations - page 2 Contracts - page 1
Contracts - page 2 Contracts - page 3 Resources 1 Resources 2 Resources 2 Sitemap
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