All is Not Lost - IR35 Case Study

The following case study highlights the importance of utilising experts when it comes to defending yourself from the Revenue in IR35 enquiries.

The client did not have Qdos Consulting freelancer insurance in place, but was referred to Qdos on the recommendation of a fellow freelancer on the eve of a meeting with some tax inspectors. Previously, for over a year, he had been challenging the Revenue's assertion that his company was caught under IR35. He had sought opinions from both accountants and a firm of employment law solicitors, both of whom were not confident of success in this area.

The immediate response from us was under NO cirumstances was he to attend the meeting. A common mistake made by many as in fact the Revenue has no right to insist on such a meeting. This advice almost certainly avoided the client from innocently incriminating himself further as the questions from the Revenue are always 'loaded' to lure the unwary into the 'employment' trap. Had this meeting gone ahead the case may well have been beyond retrieval and in the words of the freelancer "the outcome would have been disastrous for me and my family".

Having averted the first problem, Qdos set about defending the case through a combination of our knowledge of the law and the tax system in general, built up over a number of years by our experience in handling IR35 enquiries. Our experience shows that generally speaking you have to be prepared 'for the long haul' when dealing with these cases displaying tenacity and perseverance. We are always conscious of the fact that a freelancer is quite often at their lowest ebb at these times and part of our role is to encourage them to fight.

After a further year the Inland Revenue finally confirmed to the freelancer that the enquiry was over and that the company was not in fact caught by IR35.

Fortunately the freelancer had the courage and conviction for the fight whereas the great temptation after the initial advice would have been to concede defeat. It is, therefore, advisable to seek advice from specialists in this field.

Qdos Freelancer Tax Protection insurance will cover the cost of representation by a Qdos tax specialist in the event of a PAYE compliance visit and an IR35 status enquiry for just £99 per annum including IPT.

Purchase Qdos Freelancer Tax Protection.

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Posted 04/03/05

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