IR35 Guides - Are you inside or outside IR35?

Contractor Weekly, a specialist news site for contractors, has seen one of the new-style IR35 compliance letters which are expected to be sent to contractors identified as being classified as high risk by HMRC.

The letter appears to be an employer record check, but is highly selective, in that it only asks for information relating to IR35 - it asks if the company in questions is aware of the IR35 rules, and how did it arrive at the conclusion that IR35 does not apply (if this is the case).

The article explains that contractors who receive a letter of this type are likely to have been targeted in the first batch of IR35 enquiries since the release of new HMRC guidance last month.

What to do if you receive an enquiry letter

Seb Maley from Contractor Weekly told us what contractors should do to protect themselves in the event of an HMRC enquiry:

"If you receive a letter from HMRC that refers to IR35 in any way, you should send it to a status specialist straight away.

"HMRC have already signalled that they intend to use their enquiry powers at an early stage, which means they will be looking to contact your end client as soon as they can.

"This is always highly dangerous, as HMRC will ask leading questions that can quite easily catch the end client out, so it is vital that it is supervised by an expert.

"A status specialist will deal with all correspondence on your behalf, so under no circumstances should you respond to HMRC yourself. If you haven't already, consider some form of tax enquiry insurance, which will cover all defence costs for a very modest annual premium."