IR35: Confirmation of Arrangements

As HMRC ramp up the policing of IR35, now is the time for contractors to ensure they are in as good a position as possible should they receive a dreaded letter.

At Qdos we have always advocated the use of a Confirmation of Arrangements document. This is a simple form that is signed on behalf of your company and your end user, and sets out the actual working practices of the engagement.

Why use it?

Your written contract is obviously important and you should ensure that it is worded compliantly, but HMRC have always focused on the ‘true facts’ of the engagement. If you have the best written contract in the world, but the Revenue subsequently find evidence that the working practices do not match this, they will effectively say the contract isn’t worth the paper it’s written on.

To ascertain what the actual working practices are, HMRC will look to contact your end client directly. Sadly this is always fraught with danger, as the Revenue will ask leading questions and they may be talking to someone who has no knowledge of what you were actually doing or, crucially, how IR35 works. There have been numerous cases of someone from the client’s HR or legal department confirming to the Revenue how they believe the contractor works, when in actual fact the reality is very different. Unfortunately this will cause irreparable damage to your case.

The Confirmation of Arrangements will help in negating HMRC’s need to contact your client, as all of the important facts are established (and signed) in the document. This will greatly improve your chances of success and will probably save a significant amount of time.

But my end client won’t sign…

Unfortunately a common issue with the document is a reluctance on the end client’s part to sign it. This is particularly prevalent with larger organisations, who want legal departments to check everything they are putting their name to.

If you are struggling to convince your client to sign, there are a couple of points to make to them:

  • It is not a legal document. It is just for taxation purposes and will only ever be used in the event of a status enquiry.
  • Completing the document is also in the client’s interest. An IR35 enquiry can be a long, drawn out process and having this document in place will significantly reduce the client’s involvement.

We will be happy to talk directly to end users should you feel they need more information on what the form is about.

The form should be signed by someone responsible within the end client’s organisation, i.e. a project manager.

What are the steps to take to get it signed?

You can download the form from our website here (Word document). It is vital that you send the form over to us to check over before you get the client to sign. Please send draft forms tofreelancer@qdoscontractor.com. Or alternatively purchase Confirmation of Arrangements online.

Buy Online

Once it has been signed, simply keep it on file and ensure whoever is dealing with your IR35 enquiry (if you are subject to one) has a copy straight away.

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