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HMRC investigations
Overview

HMRC has changed its approach to the administration of IR35 from April 2012. An investigation into your IR35 status will usually start with an opening letter asking:

'Have you considered IR35? If so why do you consider yourself to be outside IR35? Please provide evidence to support this answer.

HMRC states that if satisfactory evidence is provided in response to the opening letter that it will be able to withdraw from the review. If satisfactory evidence is provided at this stage HMRC will provide the business with assurances that they will not open another review for iR35 for the next 3 years.

HMRC has also confirmed that it will use its powers, at an early stage, to obtain information to reduce the number of delays in cases and to facilitate case progress. An investigation can also be instigated by other routes including an aspect enquiry or a full enquiry into your company or personal tax returns.

HMRC has set up 3 specialist teams of 12 individuals based in Salford, Croydon and Edinburgh and they will cover the whole country.  Each team will have specialist inspectors embedded within them with the aim of improving quality and length of time an IR35 review takes. It does not always follow that you will be visited by the local office.

 

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