As part of the Self-employed business workshop on Thursday 20th March, QDos' Troy Stevens explained IR35, the legal implications, and how to avoid an investigation from HMRC.

1. Qdos Contractor
Understanding IR35

2. Qdos Contractor
• Business Insurance
• IR35 Contract Reviews
• IR35 Insurance
• Dealt with over 1,300 IR35 Cases
• Cover over 22,000 Contractors

3. IR35
• The Risks
• Step by Step - IR35 Enquiry
• IR35 Updates
• Compliance
• IR35 Protection

4. IR35
• Name given to the intermediaries
legislation passed in 2000.
• IR35 has an impact on all
contractors who fail to meet the
definition of ‘self-employment’ made
by HMRC.

5. £29,921£29,921
£450 a day£450 a day
Inc. InterestInc. Interest
3 years3 years
+ Potential Penalties+ Potential Penalties

6. 2011-2012 59
2012-2013 256

8. IR35 ‘Crackdown’
• “We are increasing HMRC’s
budget to tackle non-compliance.”
• Number of enquiries have risen
significantly.
• New IR35 specialist team
established.

9. • 4 Specialist Teams Added

11. IR35 Enquiry

12. Opening Letter
• Analysis of company's income falling in
the period of enquiry.
• Analysis of travelling expenses incurred
in the period of enquiry.
• Copies of all contracts falling in the
period of enquiry.
• Contact details of end client(s).

13. Response to Initial Letter
• A well drafted response can satisfy
HMRC.
• Ensure that this response is well
managed.

14. Meeting with HMRC
• Evidence is weighed up in this
stage.
• If inconclusive, the end client will be
contacted.
• Again this stage should be carefully
managed.

15. Conclusion
• HMRC will make a decision as to
whether the contract(s) fall inside or
outside of IR35.
• A contractor can launch an appeal
of an IR35 decision, which could
end up in civil courts.

16. IR35 Calculator

17. • ‘Risk assessment
criteria’.
• Officers sharing
intelligence.
• Tip offs?
How are Contractors Selected?

18. IR35 Cases Won
IR35 Cases Lost

19. IR35 Protection
• Contract Review
• Compliant Working Practices
• Tax Liability Insurance
• Basic Representation

20. • Legislation itself has not changed.
• HMRC significantly increasing activity.
• HMRC have now created 4 dedicated
IR35 teams.
• Potential for 2,000 IR35 enquiries a year.
• HMRC have ‘widened scope’ of
enquiries.
• HMRC will be quick in using enquiry
powers to contact end users.
The Future of IR35