IR35, the legislation established for the sole purpose of tackling tax avoidance requires considerable interpretation from a specialist perspective to review if a contract falls within or outside of IR35.
The review process comprises four dimensions:
Expert opinion on contract in the context of IR35 legislation
Review of actual working practices
Analysis of specific clauses and their relation to working practices
Recommendations of changes required to ensure compliance
IR35, the legislation established for the sole purpose of tackling tax avoidance requires considerable interpretation from a specialist perspective to review if a contract falls within or outside of IR35. Businesses that face an HMRC enquiry regarding the same will need to furnish the contracts, which will then be verified against the working practices to look for mismatches.
If the contract is termed inside, you may end up losing 25% or more in tax. Our considerable experience in all regulatory and tax related compliances combined with our extensive knowledge of accounting/taxation procedures equip our specialised teams to review contracts.
Our teams pore over the contracts, working schedules and SOPs before seeking additional information through questionnaires. Questionnaires are framed as per areas of operation and sector of business, and after the initial review of the contract.
The granular review we undertake, assesses the contract in the perspective of the actual working practices, to bring about compliance. This compliance can then be used as evidence for submission to the HMRC that adequate corrective measures have been concluded to bring about a re-alignment thereby taking contracts outside of IR35.
A contract that falls inside the IR35, will entail the opening of accounts for employers and employees national insurance, which can set you back with additional tax. To stay outside, you need a professional review to convince the IR35 Inspector and the HMRC that you are not inside.
While remedial measures such as an ‘appealable decision’ are open, it requires a tax assessment and NIC assessment. Would you like to take this circuitous route and contest the decision of the HMRC or would rather opt for a professional review to help you stay outside of IR35?
Our expertise as a full Accounting services, lends us the knowledge and equips us to carry out a close scrutiny of contracts and recommend the changes that will be necessary in the working practices to haul the contract out of IR 35. Our reviews are one of the most comprehensive and in-depth, looking at the workings of PSC (Personal Service Companies) and unearthing the little conflicting conditions that constitute a violation.
One of the areas where we excel is the methodology adopted. We look at a contract in exactly the same way that the HMRC looks at one to determine if it needs to be slotted inside of IR 35. This perspective helps us offer a more professional and accurate report summarised in a manner to help make necessary changes required to demonstrate to the HMRC.
If we determine that nothing can be done to take you outside of IR 35, we will help you claim eligible deductions and reliefs while remitting tax.
Let our expertise help you with the most practical and professional advice on contracts and IR35 reviews.