Many freelancers and contractors will have heard of IR35 or the intermediaries legislation. An IR35 investigation is a risk unique to freelancers who could be caught under IR35, or deemed employed.
Freelancers can insure themselves against the cost associated with an investigation under IR35 through specific contractor tax investigations insurance and ensure that, in the event of HMRC commencing an enquiry. Investigations can be prolonged and complex and expert representation is highly recommended.
IPSE provides, within the cost of membership, Tax Investigations Insurance that covers all investigations that any contractor is likely to experience into the personal or business tax affairs.
Since IR35 came into effect, IPSE has supported numerous cases in order to establish as much clarity as possible. This strategy has been successful: IR35 remains complex, but with effort and good advice it is possible to structure commercial relationships with clients that are outside IR35. In addition to extensive lobbying on IR35, IPSE has been extremely active supporting IPSE members in the fight against IR35. Of all the cases IPSE's expert advisers have been involved in, IPSE members have won 1,485 cases and HMRC has won just 8 (correct as of March 2010).
IR35 Insurance FAQ
Pre-Dispute (formerly PAYE Audit) Cover - exclusive to IPSE Plus members only. Cover kicks in at an earlier stage allowing our experts to interject directly as soon as a visit is requested by HMRC under Sch36 FA 2008. This includes a PAYE Visit (often a precursor to an IR35 Dispute) as well as a VAT or even a Real Time Records Review.
- To view frequently asked questions regarding tax investigation, please click here.
- For further information about the policy team, please click here.