Join the thousands of contractors who’ve had their working practices reviewed from an IR35 status perspective by our expert team over the past decade
By using the vastly experienced in-house expertise of Roots Contractor Insurance you can ensure you put yourself in the best position to avoid being caught on the wrong side of IR35. We’ve personally reviewed thousands of contracts and working practices reviews from an IR35 perspective, and have been working in and around IR35 since the mid 2000’s at some of the biggest names in market, so you know you are in safe hands.
Being able to evidence your IR35 status and provide this to HMRC with the necessary documentation, evidencing that you have taken proactive action to ensure you are outside of IR35 will greatly aid the defence of the case, which itself can a very stressful time. Once the working practices answers have been reviewed an opinion is provided as to if it is a pass or fail, as well as comprehensive feedback on the key IR35 issues that emerge and if they are positive, negative or neutral in relation to aiding your outside IR35 status. If the review provides a fail opinion, we will liaise with you to advise on the recommended changes you should implement to your working practices.
During an IR35 enquiry HMRC will attempt to establish if the relationship between you and the end client is disguised employment or not, so it is crucial that you are in business in your own right and can demonstrate that you provide your services to them with the autonomy any normal business would. However, the written contract between you and the end client might be perfect from an IR35 perspective, being exemplary in demonstrating key clauses such as substitution, mutuality of obligation, non-exclusivity and control, but unless it can be proved what would happen in reality it is worth very little in defence of your case. This is where the working practices review comes in.
A contract should mirror the actual working practices you and your business undertake when engaging with the end client. However, the ‘true’ contract is not the written one but the one that the review of the working practices reveals. This holds vast credence with HMRC during an IR35 status enquiry, as HMRC view the working practices as your actual working relationship with the end client. During an IR35 status enquiry HRMC will contact your end clients and ask them about what actually transpired and what could transpire if a situation arose around the terms of the contract. It is therefore crucial to ensure that your working practices match the terms of your contract – there is no fooling HMRC.
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We’ve been involved in IR35 since the mid 2000’s at some of the markets biggest companies – personally handling hundreds of IR35 enquiries and reviewing thousands of contracts from an IR35 perspective. So when it comes to IR35, you know you are in safe hands with Roots.
Every contract should ideally have the associated working practices of the engagement reviewed in tandem with it, giving you maximum peace of mind that you fully understand your IR35 status and are able to evidence it should HMRC come knocking and open an enquiry.
We let you know our opinion on your working practices and if they fall inside or outside of IR35 having considered the key status tests, and provide you with a comprehensive overview of how and why we’ve come to our decision.
It’s quick and easy to complete our IR35 Working Practices Questionnaire. No complex forms or processes, just a simple set of tick-box questions to be answered, which can be picked back up at any time and completed.
Sometimes you need to get things turned around quicker than originally thought. Thats why we offer a range of turnaround times, including next day and same day (for an additional fee) allowing you to get your review when you need it.
Once you have have paid for the product, online via our website, you should complete the online IR35 Working Practices Review questionnaire. This can be done by clicking here.
An IR35 Contract Review looks at the written agreement for the engagement and how this works in theory, whilst the IR35 Working Practices Review looks at what actually happens in reality for the engagement. HMRC place more important on what actually happens in the event of an IR35 enquiry.
During an IR35 status enquiry, HMRC will check to ensure that you are in business on your own account and that you are not a disguised employee. They will review your engagements, the associated contracts and liaise with the end clients to ensure that the working practices mirrored what actually takes place and what would be allowed to take place, as well as requesting sight of various other pieces of supporting information. Once this has been provided, HMRC will review it all and form an opinion as to if you are deemed to be a disguised employee or not i.e. inside or outside of IR35.
An example of working practices is best highlighted with the right to provide a substitute. It is highly unlikely you have ever had to provide a substitute, even though you contractually have the right to do so. How would the end client actually react and would they allow it? An end client should only refuse your right to provide a substitute on reasonable grounds, this being things such the substitute not having the required qualifications, experience or security clearances etc. Therefore, whilst a contract with fantastic substitution clauses may appear perfect, it is insufficient on its own as HMRC will want to review and establish if you can actually provide one in practice. In the infamous Dragonfly v HMRC case which HMRC won, the defendant (the contractor) was found to have well drafted IR35 clauses in their contract, but when it came to the crunch they did not mirror the true reality of the working practices, which led to a £99,000 liability judgement against them.
It is uncommon for end clients and/or recruitment agencies to insist that a contractor holds IR35 Insurance before they are allowed to commence an engagement, but many contractors decide that being uninsured against HMRC looking into their affairs is too big a risk for their business to take, and ensure they have cover in place.