Whilst the Summer Bank Holiday brought sun for many, at least 1500 contractors who provided services to GSK in the last year received intimidating letters from HMRC
Are you a contractor falling under the IR35 scheme?
It is important to read your letter carefully and seek legal advice on the same as soon as possible.
The letter may simply be a warning letter and HMRC may not take any further action however HMRC is commencing investigations into contractors’ tax affairs and it is vital you seek advice to distinguish between the two letters and any legal requirements ordered by HMRC.
Self-employed status
In their letters, HMRC is requesting that contractors confirm their employment status i.e. prove that they are genuinely self employed. HMRC refer contractors to their online tool to check employment status for tax.
It is important you seek legal advice on the working relationship between you and your company in order to assess your position. There are many factors of a working relationship that need to be considered including but not limited to:
- Substitution;
- Level of control;
- Mutuality of obligations between the parties; and
- Use of own equipment.
If you are employed through an agency, you need to check your status with the end employer and not the agency.
Our highly skilled employment and tax teams comprising solicitors and barristers can consider your contract and assess your position in order to advise you on these technical matters.
I’ve received a letter or penalty from HMRC
It is imperative that you do not ignore these letters.
If you are found to be within IR35 following an HMRC enquiry, HMRC will deliver an assessment and you must pay HMRC the tax and National Insurance contributions due, as well as any interest due on these amounts.
If HMRC consider you did not exercise reasonable care in completing your tax returns, you may have to pay an additional penalty.
Our expert tax solicitors and barristers can assist you in submitting an appeal to HMRC or the Tribunal and entering into negotiations with HMRC by providing comprehensive legal advice and robust responses to the investigators. Our tailored team which also comprises of specialist forensic accountants can calculate what you owe and make representations on your behalf to HMRC.