In an IR35 investigation, HMRC will begin by sending you an IR35 Enquiry Letter requesting certain information from you considering IR35.
They will select an accounting period into which to enquire - usually one or more tax years. For this period, they will also request the corresponding written contracts, analysis of fee income and certain expenses (e.g. travel and subsistence). The letter will then go on to ask if you have considered IR35 specifically, and the reasons for if you consider yourself outside of IR35.
Letters have not always been this direct as to what HMRC are asking. They previously often started as employer compliance reviews about payroll, or requests to confirm or clarify a fact on a contractor’s tax paperwork. Even more recently, in the prominent case of Christa Ackroyd (CAM Ltd vs HMRC, 2017), Ms Ackroyd was not clear that it was an IR35 enquiry as the letter received described the request as a “check of employer and contractor records”.
The below is a genuine example of a letter received by a client. We cannot guarantee that any IR35 enquiry letter will be of similar clarity - any requests from HMRC should be treated with care, preferably by an experienced tax advisor.
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