In recent months, we have been working with a range of clients in different sectors to complete
mock investigations. This service gives businesses a better understanding of how HMRC would undergo an investigation and where their business would stand in a real-life scenario.
With HMRC now starting to investigate private sector businesses, we wanted to highlight our key findings from our most recent investigations as the majority of businesses are failing for the same reasons.
In our recent study, there are four common trends we have identified that demonstrate a lack of compliance knowledge and the ability to demonstrate
reasonable care:
Our key findings outlined
- Incorrect person completing assessments: Accountable function completing the IR35 assessment rather than the hiring manager
- Lack of understanding of legislation: Insufficient knowledge of the legislation from the hiring managers or supporting functions, resulting in possible incorrect answers
- Using multiple online tools: CEST and other assessments tools being used to backup role-based assessments, leading to conflicting outcomes and not reassessing undetermined populations
- Role based vs Contractor based assessment: Too generalised in the grouping of assessments making IR35 reviews non-compliant in the eyes of HMRC
There’s a lot to consider when it comes to the IR35 legislation, so you need to ensure the person responsible for assessing the initial job status, rereviewing roles and implementing your IR35 processes internally understands the ins and outs, otherwise, you could be left with a hefty fine!
If you are reading this blog and thinking a mock investigation could benefit you or know that your business processes have included some of the above points and you have concerns, don’t hesitate to
get in touch! We are more than happy to advise and work with you to ensure your IR35 processes and procedures are compliant in the eyes of HMRC.
