When HMRC calls over IR35 here is what they will ask

HMRC calls
When HMRC Comes Calling

HMRC calls

What happens when HMRC calls?

HMRC sent 96 questions to an IT contractor, who promptly shut down his company and went permanent. These are for limited company contractors rather than umbrella company contractors.

Here are some of the questions when HMRC calls:-

Limited Company Formed

1. Will you please confirm when you formed the company and the date you registered it at Companies House.

2. How many years have you been contracting since you were last a permanent employee of someone else‘s business?

3. Explain the nature of the work of the company and the type of work it specialises in.

4. Does the company carry professional indemnity insurance, public liability insurance and employers‘ liability insurance. If so will you please let me have copies of the relevant certificates.

Company Shareholders

5. Have you and your wife, as shareholders of the company, invested any money in the company. If so, will you please let me have full details of those investments.

6. Did the company need capital in order to commence trading, and if so explain how you financed the capital.

7. Please let me have an explanation of the equipment that was necessary in order to commence trading, together with the cost of this equipment and details of how you financed it.

8. What is the current accumulated cost, excluding depreciation, of the company‘s fixed assets including office equipment, computers and software.

9. What expertise do you possess in the work that the company does. Please explain this expertise and the qualifications and experience that you have within this field.

10. Where did you work before you became a director of the company.

11. If the registered office of the company is at your home and where the company trades from explain what facilities are present in order for the work to be completed.

Sales & Marketing

12. Does the company advertise and market it‘s (sic) services. If so, please let me have copies of adverts.

13. Please let me have the details of the names and addresses of each agency that the company is registered with.

14. In the last 12 months did the company have any income from non-contracting business. If so what was the nature of the business and what percentage of the total income of the company came from this non-contracting business activities?

15. From the period commencing 6 April 2000 please describe the actual work the company did for each client.

16. Were you interviewed on application for any contract? If so, please let me know by whom and what was discussed at the interview. What was said about the nature of the work to be done, and was the subject of the Service Company raised. If so, what was said about it.

17. At any interviews, did they describe the responsibilities to you?

18. Let me have a description of the process of application through to acceptance, together with a copy of any CV submitted.

19. What personal references did the company give in respect of you? Do you know whether the client companies took any of them up?

When HMRC Calls

This is just the first 19 of the 96 questions when HMRC calls. When HMRC calls over IR35, therefore, you had best prepare yourself for this avalanche of questions.

They’ll ask for just about everything when HMRC calls.

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