Concerned About IR35?

With the growing number of cases by the dedicated IR35 taskforces for a rather ambiguous legislation, it is no wonder that many contractors may feel uneasy about their contracting future.

The consequences of being caught by the legislation can be financially crippling and emotionally distressing. If caught by the legislation, i.e. deemed to be a disguised employee after an investigation, you will be charged for all of the backdated tax and NICs that should have been paid previously (this means on all income during the accounting period in question which could be up to six years), plus any interest payable on those liabilities and penalties which are dependent on how intentional the courts deem your mistake.

This ‘potential’ is what stirs the contracting community when it comes to the IR35 legislation and anybody can be targeted by the Revenue, sometimes with some rather aggressive tactics. It is not all bad though, for as long as you take the appropriate measures in safeguarding your business, including paying the correct tax and NICs for your situation at any given time, it is unlikely for serious trouble to arise.

Your written contract is the first thing HMRC will want to look at, along with your accounting records. It is therefore important to ensure it is robust in terms of IR35. Qdos have a dedicated team of IR35 gurus who offer professional IR35 reviews so you can ensure yours will stand up to the test. We can also review your working practices which hold more weight in an investigation than your initial written contract. This is the day-to-day working relationship with your end client and it can determine the outcome of a case. Having proper assessment of your status through your contract and working practices will not only indicate whether or not a deemed salary is required, but will likely reduce any penalties should you be eventually caught.

Further concern may lead to the desire for some assurance if you were investigated. Qdos have insurance policies for all your needs, including Freelancer Tax Protection which provides you with the professional representation needed in any HMRC enquiry, including IR35, or Tax Liability Cover which provides you with this same professional representation but also continues to cover for the liabilities, penalties and interest (up to your chosen limit of indemnity) charged in the event of losing a case.

As well as the above services, Qdos Contractor have a wealth of knowledge and understanding cultivated by a team of dedicated and passionate experts, allowing us to provide in-depth information and consultation with regards to the IR35 legislation.


By:Jane Hailstone

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