What to do if you disagree with HMRC's decision of your IR35 status?

How to appeal your IR35 decision

In the event that you have been unfortunate enough to be subjected to an IR35 investigation and the Revenue have deemed you a disguised employee of your end user yet you disagree with their decision, you will have the right to appeal to an independent tribunal.

A tribunal is put before either the General Commissioners or the Special Commissioners. In an appeal, it would be your responsibility to put forward your case and prove to them that the Revenue made an incorrect conclusion as to your employment status. As it is in effect, the intermediary (your company) appealing to the decision as opposed to yourself, the ‘worker’, you will need to provide any written contract between the intermediary and the client and any contract between the worker and the intermediary should one exist.

The appeal will look at the same factors which are used to assess your status by the Revenue and any professional reviews you may have had, including:

• The existence or non-existence of a right to substitute
• The degree of control held over the worker by the end client
• The existence of a mutuality of obligations
• Any employee-like benefits
• Provision of equipment
• Any absence procedures
• Any concurrent contracts
• Continuity of the engagement
• Financial risk
• Termination agreements
• If the contractor has become part and parcel of the organisation
• The basis in which payments are calculated

As with any review of your employment status, the tribunal will need to ascertain whether the written terms are a true reflection on the actual substance to the arrangement with your end client. Oral evidence will need to be given to confirm the reality of your agreement, ideally from both yourself and somebody from the end client.
It is preferable for your witness from the end client to make a written statement prior to the tribunal to ensure they have correct dates etc. and cover all the necessary points along with anything further they would like to add. If a written statement is submitted prior to the hearing, and the Revenue agree with the statement, they may not be required to appear at the hearing. On the other hand, should you require a witness to appear, you can simply request somebody from your end client to be your witness, however if there are concerns as to whether they will actually appear, you can apply in writing for a witness summons.

Qdos Tax Enquiry Insurance and Tax Liability Cover (TLC35) policies continue to cover and provide representation even if your case should go to tribunal so you will still have an IR35 defence expert backing your corner if you wish to appeal the Revenue’s decision.