We provide to our Freestyle clients a Tax Investigations Service fully backed by an Insurance Policy, which Freestyle Accounting has taken out with Abbey Tax Protection.
We are able to make a claim in respect of the fees which we accrue when we defend a client who is under investigation by HM Revenue & Customs (HMRC) in respect of any of the following events and up to a Limit of Indemnity of £75,000.
(i) Business Self Assessment Full Enquiry
The investigation which takes place when an officer of the Commissioners of HMRC makes a request to examine all of the our Client’s business books and records and issues a formal Notice to the Client under S9A or S12AC of the Taxes Management Act 1970 or under Para 24(1) Schedule 18 Finance Act 1998.
(ii) Personal Self Assessment Full Enquiry
The investigation which takes place when a formal Notice is issued to our Client under S9A of the Taxes Management Act 1970 to make a Full Enquiry into the Client’s non-business affairs, for example into rental income and/or interest received. This will be accompanied with a request to examine all of the prime documents.
(iii) Income Tax Self Assessment Aspect Enquiry
The enquiry which takes place when a formal Notice is issued to a Client under S9A or S12AC of the Taxes Management Act 1970 in order to make an Aspect Enquiry into our Client’s Self Assessment Return relating to the operation of PAYE, NI and/or IR35.
(iv) Corporation Tax Self Assessment Aspect Enquiry
The enquiry which takes place when a formal Notice is issued to our Client under Para 24(1) Schedule 18 Finance Act 1998 in order to make an Aspect Enquiry into the Client’s Self Assessment Return relating to the operation of PAYE, NI and/or IR35.
(v) Employer Compliance Reviews, Employer Compliance and IR35 Disputes
(a) The request by HMRC either via an Employer Compliance Visit or by correspondence to review the our Client’s PAYE and NI records, including any contracts for service and dealing with any resulting queries and issues raised by HMRC. This will include checking HMRC’s calculation and determining whether there is a prospect of disputing HMRC’s calculation, but not a formal contract review with a written report and contract opinion.
(b) The enquiries which take place following an expression of dissatisfaction with our Client’s PAYE, and/or NIC affairs following an HMRC employer compliance visit or following an expression of dissatisfaction with the Client’s P11Ds or P9Ds.
(c) The enquiries which ensue following either the issue of a Notice under Para 24(1) Schedule 18 Finance Act 1998 or an HMRC compliance visit challenging the status of a Client’s contract for services and invoking the IR35 legislation.
(vi) VAT Dispute
The enquiries which take place following a written decision, assessment or statement of alleged arrears made by HMRC into a our Client’s Value Added Tax Return and/or any related Value Added Tax default surcharges and misdeclaration penalties.
The intention is that the policy will cover the contractor/freelancer client from the moment an Employer Compliance Visit is requested, or any other enquiry commences through to the conclusion of that enquiry. Please contact Freestyle Accounting on 0870 850 0887 for further information.
HMRC have several routes of enquiry into a contractor: the company tax return, the individual’s tax return, PAYE Returns and potentially even VAT returns – all these enquiries are included within our Tax Investigations Service.
Nevertheless, until now the most common approach has been for HMRC to ask to undertake an Employer Compliance Visit at the premises of the business. It would always be our advice that if such a visit is to be held, then it should be at Freestyle Accounting’s premises in Coventry with one of our staff on hand to answer any questions that HMRC may have about the records. Alternatively, the visit can be refused – there is no obligation on the taxpayer to attend a meeting with HMRC – and we can ask for the matter to be dealt with by correspondence.
HMRC may huff and puff, but they will have to comply with this request and it will not be long before they establish that you are a contractor and call for the contracts that you have been undertaking, as well as asking for a large questionnaire to be completed about your working practices. HMRC will then seek to challenge the status of those contracts and argue that you are caught by IR35.
Throughout the enquiry until its conclusion, not only will we be able to claim upon our insurance policy to cover our fees, but we will also be able to call upon Abbey Tax Protection’s status specialists who deal with IR35 enquiries on an almost daily basis. It is impossible to say how long such an enquiry will last; it could be six months, it could be two years.
What we hope is reassuring is that how ever long it lasts, you are in capable hands and the cost of defending the enquiry is one less thing to worry about.