HMRC are writing to personal service company contractors to warn them that they may be investigated under the IR35 tax rules.
The warning letters ask contractors if they have considered IR35. If the contractor doesn’t think they are caught by the rules they are then asked to provide evidence to support this.
The letters come on the back of the new IR35 guidance issued by HMRC in May. The guidance explains HMRC’s risk based approach to checking business’s compliance with IR35. It also enables people to use various business entity tests to determine which risk band they are in.
If you receive such a letter (or already have) you are likely to be in the ‘high risk’ band.
If you get a letter or are concerned about IR35 please call Ruth Dooley on 01452 634800 or email her at email@example.com