HMRC spot checks

[d000hg]

The question I would ask is why are you so worried about it? If you have done what you can, show due diligence in your accounts and correctly declared your IR35 status what is to worry.

Because even if you're in the right, being investigated would be a big PITA?

If you get a spot check do you have to explain everything, or can you just say "here's a password to my DropBox account, off you go"?

[TestMangler]

Thanks for your comments above. I have insurance with PCG to cover tax investigations. What happens in the worst case, if I am challenged on IR35 but PCG (Accountax/Abbey) dont want to defend it (there is a clause to say that if they dont think there is a reasonable chance of success they wont defend the case). I guess I pay up in that scenario???



Yes, the contracts are sound, but I have no record that they have been checked. However, it is the more subtle working practices criteria that are more unclear.

In that case, you should read up on how to invoke this cover if required.

There are a few things you have to ensure that you do (and don't do). From a certain point in the 'check up', if it develops into something more, you have to ensure that you don't answer or hand over anything.

Best read the policy or phone the helpline if you're worried.

Taking the opinions of people who don't actually know is not a good idea

[xoggoth]

Tax officers will no longer make unannounced visits to small companies

They were doing that? Must have wasted a lot of time. One is obliged to keep adequate records but AFAIK there is no requirement for them to be instantly accessible on demand.

[malvolio]

Thanks for your comments above. I have insurance with PCG to cover tax investigations. What happens in the worst case, if I am challenged on IR35 but PCG (Accountax/Abbey) dont want to defend it (there is a clause to say that if they dont think there is a reasonable chance of success they wont defend the case). I guess I pay up in that scenario???



Yes, the contracts are sound, but I have no record that they have been checked. However, it is the more subtle working practices criteria that are more unclear.

So what you do if you get the brown envelope is contact the office, fill out the claim they'll send you and sit back while the professionals deal with it. There is no question you will be defended, unless you have done something illegal, so I've no idea where you got that idea: PCG spent close to £500k pursuing the Arctic case, they won't balk at a basic investigation.

It's why you joined, remember.