Specialist insurances and IR35 advice
The importance of having your contracts reviewed from an IR35 perspective cannot be underestimated. When HMRC decide to open an enquiry in to the IR35 status of a contractor, the contract(s) in question will be requested and reviewed, along with liaising with the end client(s) to ensure that the working practices mirror the written terms. Being able to evidence your 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 contract has been reviewed an opinion is provided as to if it is a pass or fail. If the review provides a fail opinion, we will liaise with you to advise on the recommended amendments and additions to clauses within the contract and then re-asses it once implemented.
During a HMRC 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 contract and liaise with the end client(s) to ensure that the working practices mirror 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.
All contractors in business today need to be proactive and show that they have taken reasonable steps to understand IR35 and ascertain their status accordingly. By taking out a contract review this demonstrates to HMRC exactly that, and is a key indicator in proving your IR35 status.
By using the vastly experienced in-house expertise of Larsen Howie you can ensure you put yourself in the best position to avoid being caught on the wrong side of IR35 by having your contract reviewed and specialist advice provided.
Overall inside/outside opinion
In a nutshell we let you know our opinion on your contract and if it falls inside or outside of IR35.
Succinct list of essential changes
Our skilled team review your contract and provide feedback in the form of a list of essential changes having scrutinised the contract for all of the archetypal IR35 fail clauses, and advise you on the changes advised to be made to ensure you are outside of IR35.
Agency & end client liaison
There are times when the agency or end client is being difficult to get hold of and/or deal with. Our team of experts have the experience to negotiate on your behalf to ensure that your contract has the required new clauses added, or existing clauses amended so that your position and IR35 status strengthened. It is common for issues to arise around making changes to a contract and there being a reluctance for the agency or end client to agree to them, especially with the larger organisations who often have to go through a legal team to get the changes reviewed and agreed. We are used to dealing with this and use our vast knowledge and expertise to ensure it gets done as quickly and as hassle free as possible.
Required insurances highlighted
We will provide a clear and complete list of the insurances your business is required to have in place prior to and during the contract. Larsen Howie offer contractors the ability to quickly take out Professional Indemnity, Public and Employers Liability at competitive rates via our state of the art website.
Bespoke comments on each applicable clause
As part of the full contract review each contract is full reviewed and scrutinised by one of our highly experienced and specialist team. They will provide bespoke comments on crucial clauses as well as important ones, highlighting where they need to be removed or amended, and what the impact of each is, providing you with a complete personal service.
Guidance on legislation for extended contracts
Extending a contract past its initial term can mean that legislation comes into play that can affect your IR35 status. We advise if this affects you, and how - via our 'IR35 Contract Review - Refresher' product which is included free of charge.
Guidance on switching to contracting
Understanding the basics of contracting can be tricky. We provide clear and concise guidance on what you need to do to be best prepared to enter the world of contracting, from setting up a company and a bank account through to what insurances you will need.
Confirmation of Arrangements document
As part of the service you are issued with a complimentary template document that you can populate with your company details and get your end client to sign. By completing this you are further strengthening your IR35 position, in turn risk managing down any financial loss, increasing your chance of a successful claim and proving that you are in business on your own right.
It is a basic form that can be easily completed by you on behalf of your company and sent to the end client for them to sign and return, setting out the actual working practices of the contract. It is often worth reminding the end client (or agency) that this is not a legal document and is only ever used for taxation purposes if a IR35 status enquiry occurs, and that by completing the document is in their interests as it strengthens your IR35 position and reduces the time they will be involved in any IR35 status enquiry as a result, therefore assisting both parties.
Once the document has been signed and returned, it shows in writing the intention of the parties when entering in to the contract. However, contractors often deal and operate through an agency not the end client itself, meaning that they seldom get to see the upper level contract between the agency and the end client. This problem is solved via the Confirmation of arrangements document and evidences that you and the end client are in agreement that you are in business in your own right as a limited company and will be operating as such.
Working practices review
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 client(s) and ask them about what did transpire and what could transpire if a situation arose around the terms of the contract, therefore ensuring that your working practices match the terms of your contract is essential in establishing your IR35 status – there is no fooling HMRC.
To ensure maximum protection and to belt and braces your position you should get the end client to provide written confirmation of your working practices, which can be done by completing the Confirmation of Arrangements document mentioned below.
The confirmation of arrangements document establishes the facts of the contract and can be evidenced in writing to HMRC when they enquire into your IR35 status. This reduces the need for HMRC to contact the end client to dig for answers, as well as mitigating any damage done to the defence of your case by HMRC when they do contact them to ask questions as to your working practices, as often they will receive incorrect answers due to them speaking with the wrong person, department or someone has no idea what you were actually doing, especially when HMRC are known to ask leading questions.
Copies of your contract and any other supporting documentation is uploaded online. This can be done by clicking here.
If you already receive, or choose to add the IR35 Working Practices Review to your order, you should complete and submit this to us online. This can be done by clicking here.
And finally, for those contractors that think that by not having a written contract in place means they are exempt from being caught inside IR35 then they need to think again. HMRC can, and will likely conclude a ‘hypothetical contract’ based on the working arrangements they deem are in place between the contractor and the end client, which will likely be found to be inside of IR35.