Ever wondered what the opening letter to an IR35 investigation would look like? See below to find out what you would need to supply, what would be expected of you and the kind of timescale you would have to respond in.
Also see two downloadable HMRC fact sheets which are nearly always referenced somewhere in initial proceedings:
Example HMRC IR35 Investigation Notification Letter
Wealthy and Mid-sized Business
PO Box 168
F.A.O Mr A Contractor
123 Fictitious Avenue
Phone: 03000 000 000
Fax: 03000 111 1111
Date: 31st January 2019
Case Ref: CFS-1234567
Dear Sir or Madam,
Check of employer records
Every year we check the records of a number of businesses to make sure they are correct and complete and that the business is paying the right amount of tax and National Insurance Contributions (NIC). We have now selected your business for a check.
I confirm that this is not an enquiry into your Corporation Tax Return.
What I am asking for
To help me with my check please send me the following documents and information
- A breakdown of the income of Freelancer Ltd over the tax years ending 5th April 2017 and 5th April 2018.
- Copies of all contracts and supporting documentation giving rise to that income. Supporting documentation may include, but is not limited to:
- Assignment schedules
- Staff handbook
- Job description paperwork
- Contract extension paperwork
- Any letters/email/faxes relating to contract negotiations
- A copy of the accounts submitted by the company for the years ended 31st March 2017 and 31st March 2018.
- Details of any expenses claimed from the end client(s).
- Please describe your role with your end client(s) and describe in layman’s terms, your job within each sector.
- Please provide a name and contact details for the person at the end client(s) who knows your working practices the best.
If the company has dealt with an agency of any kind I realise that you may only have documentation of the arrangements between the company and the agency. In those circumstances I will need to know the names and contact details of all the “end clients”, that is, the clients of the agency for whom work was actually undertaken and from whom the company’s payments originated.
Will you please also tell me whether you have considered the possibility of the company being subjected to what is commonly referred to as the IR35 legislation? If you have, and have concluded that the company is not subject to that legislation, then please explain to me the basis upon which you arrived at that conclusion. I am asking this to help me be fully aware of and understand any view you may hold on the application of the IR35 legislation.
Please ensure you send what I have asked for by 2nd March 2019. If you need any help or more time to do this, please phone me straightaway.
Following my review of the contracts and consideration of information provided I may need to arrange a meeting with you.
More information about the check
I enclose two factsheets CC/FS1a General Information and CC/FS3 Visits – pre-arranged which give you more information about this type of check. If you have any questions about the check or possible visit once you have read these, please call me on the number at the top of this letter.
I have also enclosed copies of the:
- HMRC – Correspondence by Email authorisation, employer’s acceptance of email correspondence risks
- HMRC – Authority to correspond by email, agent’s acceptance of email correspondence risks.
If you would like us to correspond using email please complete the above document that should be applied.
Whichever method you choose to contact us about this check, you need to quote the case reference CFS-1234567 and any other references shown above. If you write you need to use the address shown above. If you send documents you must tell us if you want them returned as we may securely destroy them after 90 days.
You can also contact Andy Vessey, our Head of Tax, national IR35 expert and author of this sample letter, with any queries or concerns here.