HMRC will not open a new compliance enquiry into a contractor’s return for tax years before 6 April 2021 in circumstances where:
a client decides that a contract is within the off-payroll working rules (IR35)
a contractor changes the way they work from providing and invoicing services through an intermediary entity to now being paid via a client or end user’s payroll
a contractor ends a contract because they disagree with a client decision on status
This includes any decisions that clients may have made to prepare for the April 2020 changes, which were delayed.
The only reason HMRC will open an enquiry into a contractor’s return for tax years before 6 April 2021 using information acquired through the off-payroll working rules changes is if there is reason to suspect fraud or criminal behaviour.
If you have an ongoing compliance enquiry with HMRC, we will not ask for any information on decisions that clients may have already made or were in the process of making for the April 2020 changes, (which were delayed), as evidence for those ongoing enquiries. Contractors can take reassurance from understanding that:
HMRC took a similar approach to contractors in the public sector when the rules changed in 2017
HMRC has never opened a compliance enquiry into a contractor’s compliance with the off-payroll working rules for tax years before 6 April 2017 using information acquired through the off-payroll working changes brought in by the 2017 reform