Qdos Contractor

Understanding IR35

Qdos Contractor

• Business Insurance

• IR35 Contract Reviews

• IR35 Insurance

• Dealt with over 1,300 IR35 Cases

• Cover over 22,000 Contractors

IR35

• The Risks

• Step by Step - IR35 Enquiry

• IR35 Updates

• Compliance

• IR35 Protection

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.

£29,921£29,921

£450 a day£450 a day

Inc. InterestInc. Interest

3 years3 years

+ Potential Penalties+ Potential Penalties

2011-2012 592012-2013 256

IR35 ‘Crackdown’

• “We are increasing HMRC’s budget to tackle non-compliance.”

• Number of enquiries have risen significantly.

• New IR35 specialist team established.

• 4 Specialist Teams Added

IR35 Enquiry

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).

Response to Initial Letter

• A well drafted response can satisfy HMRC.

• Ensure that this response is well managed.

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.

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.

IR35 Calculator

• ‘Risk assessment criteria’.

• Officers sharing intelligence.

• Tip offs?

How are Contractors Selected?

IR35 Cases Won

IR35 Cases Lost

IR35 Protection

• Contract Review

• Compliant Working Practices

• Tax Liability Insurance

• Basic Representation

• 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