With changes to the IR35 rules happening all the time, shifts in responsibility happen, placing the onus on different parties to verify the IR35 status of freelancers and contractors. However, given the complexity of the tax legislation, parties cannot afford to be complacent and assume that the other will navigate the verification process correctly.
Fortunately, there is a silver lining amid this uncertainty: you now have the opportunity to address this issue proactively by taking advantage of an HMRC IR35 contract review. By taking control and laying a solid foundation for your status assessment, contractors and freelancers can ensure compliance, mitigate risks and maintain a secure professional footing in the ever-evolving landscape of freelance and contract work.
Why Seek Professional IR35 Contract Review Services?
Although it is true to say that you can challenge a Status Determination Statement, it is still worth your time and effort to have your contracts reviewed by a professional. Here’s why.
1. Verify your IR35 status
One of the primary reasons for seeking a professional IR35 contract review is to obtain an accurate determination of your employment status. As the IR35 rules evolve, assessing whether or not you are affected is crucial. One of the benefits of a professional contract review conducted by our experts here at BEB is that we will carefully analyse your employment arrangements, contractual terms and actual working practices to provide an authoritative assessment of your status.
2. Ensure compliance with HMRC’s regulations
It is imperative that contractors and freelancers always remain compliant with HMRC’s regulations. With this in mind, by allowing contract and tax law experts to review your contracts, you can ensure that your working practices are always aligned with the rules and guidelines set out by HMRC. This will help minimise the risk of penalties, investigations and potential financial liabilities.
3. Draft contracts that are IR35-friendly
An IR35 contract review can enhance the “IR35-friendliness” of your contracts. The review will scrutinise your existing contracts, identifying areas that could pose risks in relation to non-compliance. Then, by making the necessary revisions and incorporating specific clauses, you can strengthen your contracts and increase the likelihood of a favourable and accurate status determination.
4. Obtain evidentiary support in the event of an HMRC enquiry
If you ever find yourself in the unfortunate position of being subjected to an HMRC enquiry or investigation, having your contracts reviewed professionally can provide you with crucial evidentiary support. The review report and expert analysis will serve as valuable documentation to substantiate your position and demonstrate that you have taken reasonable care to verify your IR35 status. This can be instrumental in defending your status determination and mitigating potential financial and legal consequences.
What is Included in an HMRC IR35 Contract Review
When you undergo an IR35 contract review, you can expect a comprehensive evaluation comprising the following elements.
1. Contract analysis
A comprehensive IR35 contract review involves a detailed analysis of your contractual agreements. This analysis examines the terms, conditions and clauses within your contracts to determine their compliance with the IR35 regulations. The review will assess factors such as control, substitution and mutuality of obligation to evaluate the nature of your working relationship with your client.
2. Working practices evaluation
As well as the contract analysis, an IR35 contract review involves an evaluation of your actual working practices. We will examine how you carry out your work in practice, including the level of control exerted by your client, the degree of autonomy you have and whether your working practices match the terms stipulated in your contracts. This assessment will help to determine whether your working arrangements indicate a genuine freelance or contractor relationship.
3. HMRC compliance assessment
An essential component of an IR35 contract review is the assessment of your compliance with HMRC’s regulations. The review will analyse your contracts alongside your working practices to ensure they align with the guidelines outlined by HMRC. This will help identify any areas of potential non-compliance and provide possible solutions on how to address them.
4. Risk identification
During the HMRC IR35 contract review process, our experts will also identify potential risks relating to compliance. These risks could include ambiguous contract terms, contradictory working practices or other elements that may increase the likelihood of an HMRC investigation or challenge. By identifying these risks, the contract review will help you proactively address and mitigate any issues.
5. Report and recommendations
Following the contract analysis, working practices evaluation, compliance assessment and risk identification, you will receive a report about your contracts. This report will include a summary of the findings, highlight areas of concern or potential non-compliance, and offer recommendations for improving your IR35 status.
6. Consultation and guidance
In addition to the report, you may also receive guidance and consultation services from experts in the field. This will allow you to discuss the findings, ask questions and receive personalised advice tailored to your particular circumstances. For example, our team at BEB can offer clarifications, address concerns and equip you with practical strategies for writing clear contracts and managing your IR35 status effectively.
By taking advantage of BEB’s professional IR35 contract review services, you will receive valuable insights and expert guidance which will enable you to navigate the complexities of the IR35 regulations with confidence. A comprehensive review covers all the essential aspects, from verifying your employment status and ensuring compliance to making sure your contracts are more IR35-friendly. As a result, you will be able to proactively safeguard your professional future and ensure a good working relationship with your clients.
At BEB, we can provide you with the contract expertise and support you need to help ensure you are always IR35-compliant. Get in touch with our team today!