So much has changed in the last five years in respect of IR35 and how HMRC operates within the framework of the Intermediaries Legislation, it’s hard to believe how different the landscape looks since the legislation was enacted in 1999 and came into force in April 2000.

What hasn’t changed though is that it is still essential that your clients understand their IR35 status: whether they are in the private or the public sector.
 

IR35 in the private sector

There is no better starting point than a comprehensive and independent contract review. We will review your clients’ contracts, along with their working practices, to determine whether or not they are operating outside of IR35. 

They will receive a written report with suggested contract amendments where appropriate, together with an opinion on their status. Whilst HMRC are at liberty to challenge the opinion, it does demonstrate that your client has undertaken the appropriate level of due diligence. 
 
If a contract is deemed ‘outside of’ or ‘not caught by’ IR35, Abbey Tax can also offer tax losses insurance to your contractor (personal service company) clients, which will pay any tax, interest and even penalties, if HMRC is successful in arguing that IR35 applies.

In order to have the tax losses insurance, they will also need tax enquiry protection, which means that if you are offering a tax investigations package to your client base, they will need to subscribe to your service.
 

IR35 in the public sector

The decision is rather taken out of your clients’ hands, as it is the public sector body which has to make that IR35 status decision. We are aware that some bodies have taken a simplistic approach of treating all engagements as ‘caught’ or refusing to deal with PSCs. However, with many freelancers opting for the private sector, it is inevitable that departments will lose resources and project deadlines will begin to be missed. Other public sector bodies are attempting to approach the new public sector rules (in force since 6th April 2017) in the way they were intended and they aren’t tax experts. So they may need help and we can provide working practice reviews to do exactly that.
 
Looking further ahead, some of your clients may seek to amend their self assessment return to argue that they have overpaid tax. Again, your clients may be looking to a specialist for support to help them provide the compelling evidence they need to argue their case. 

To ensure your clients' businesses are protected or to give them the support they need when dealing with engagements in the public sector, please contact the contractor section on 0345 223 2727 or email contractreviews@abbeytax.co.uk