Part 2 – Contractual and working practice reviews
IR35 is a piece of legislation relating to employment status for tax purposes, if the person completing the assessment is suitably qualified (i.e. legally qualified) then the reviews are likely to pass reasonable care as HMRC state that seeking the advice of a qualified professional is sufficient!
What do I need to do to complete an IR35 audit?
For this to be classed as a full review then all contracts in the supply chain and the working practices should be reviewed in conjunction, again this is where you need to ask yourself if the person completing the review is suitably qualified and has the right skills to complete and review both the contractual situation and the day to day working practices.
The contracts in the supply chain, both the MSA (Master Service Agreement) and Contract for Services should be reviewed, ensuring that any terms flow through that contractual chain and reflect accurately the working practices and engagement in principle.
A contract that doesn’t reflect the working practices or vice versa is likely to be frowned upon by HMRC and lead to further investigations and an incorrectly determined SoW, Managed Service or Contracted out Service could lead to the contract looking contrived and opening up the entire supply chain to further risk.
What should I look for in an IR35 review service?
If you are looking for an IR35 review service, you need to ensure both the working practices and the contracts are reviewed. An online tool cannot assess the contract or make recommendations for changes to strengthen the IR35 opinion, so you need to consider carefully how you plan to pull these 2 separate assessments together.
Doing half the job via an online tool may seem the easier option but will create you more work and cost in the long run when having to engage in contract reviews.
If you think your business doesn’t’ have the experience to complete this process inhouse, contact Brookson Legal for further advice.