IR35: spotting and responding to an HMRC enquiry

HMRC are increasingly focused on IR35 compliance and enforcement, exposing businesses to significant tax risks. There is no uniform approach to how enquiries commence; seemingly generic information gathering is often followed by targeted questions. HMRC tend to request a wide range of information, broadly focused on information about processes and status determinations. Businesses with large contractor populations and complex supply chains are most exposed to risk. To manage IR35 risks effectively, businesses should seek advice before responding to any IR35 information request from HMRC and review IR35 compliance procedures to ensure they remain robust and satisfy the ‘reasonable care’ requirements.