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Contractor Tax Protection Tax Liability Cover (TLC35) and IR35 insurance from Qdos Consulting

IR35 - how to manage evidence of your employment status

Published on Sep 22, 2009 |

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If your contract falls outside the IR35 rules, it is important that you gather and keep supporting evidence to show that this is the case.

Rather than assume that you will never be the target of an HMRC investigation and do nothing, it is worthwhile being proactive and take the time now to put together the relevant documentation relating to each contract you have worked on.

In the latest in an informative series of video guides to IR35, BFCA Chartered Accountants have released a five minute film on "how to manage your proof and evidence" which concisely explains how to do just that, and protect yourself against any future employment status claim.

All the evidence you gather for each contract should be retained for a minimum of six years after the completion of each contract.

BFCA also point out that "it is also important that you write letters of 'confirmation of real arrangements' to both the agency and end client to support your employment status claim."

IR35 status - what evidence should you keep?

1. The actual contract.

2. Your decision making processes in establishing that you are not caught by IR35.

3. Confirmation from client/agency relating to personal service, control and mutuality of obligation (MOO).

4. Correspondence regarding the lack of any of the above factors.

5. Phone lists, or site badges which state that you are a "contractor".

6. Internal documentation showing that you are referred to as a "contractor" rather than an "employee".

7. Any notes relating to negotiations over the contractual arrangements.

8. Advertising, websites, business cards, insurance while in contract.

Further Information

You can view the video at YouTube alongside others in the series.

For information on how to determine if your contract is likely to be caught by IR35 in the first place, read How to comply with the IR35 rules, our Guide to IR35, and practical steps to review your IR35 status.