Templeton Brook Witt assists you in understanding that the IR35 tax regulations is essential if you work as a contractor or freelancer in the UK in order to correctly determine your employment status and prevent HMRC from conducting tax investigations. If HMRC feels you are erroneously identifying yourself as self-employed, they may begin an investigation into your tax affairs. IR35 laws govern whether you should be classified as an employee or self-employed for tax purposes. In the event that you work for one customer and receive a significant portion of your revenue from that client, it may be assumed that you are in fact working for that client as an employee. HMRC will carefully examine your relationship with that client to determine if you oversee the task, you are performing or if the client is giving you instructions on how to accomplish it. You can be regarded as an employee and have to pay employment taxes if you are carrying out the client's instructions. To avoid any misunderstandings, it is crucial to create a contract that is crystal clear about your obligations and connection with your client. Templeton Brook Witt's team of professionals can help you design the appropriate contracts and offer full assistance if you're involved in an IR35 dispute.
As a self-employed contractor, you ought to be prepared to take on some financial risk and have discretion over your payment options. It can be a sign of an employment relationship if you don't assume any financial risk or have no say in how you get paid. Templeton Brook Witt’s professional experts have the knowledge to guide you in all your financial decisions as HMRC will consider whether you are managing your cash flow and billing your clients for your services. If you receive a fixed wage, it can indicate that you are employed. To avoid any tax investigations or IR35 disputes, it is crucial to have a well-written contract outlining your obligations and working relationships with your clients. Your contract should make it crystal clear that you are a sole proprietor and are responsible for covering your own taxes and social security. Your contract should also include a substitution clause that enables you to send a replacement to complete the work if necessary. If your contract contains a substitute clause, it suggests that you are truly independent of the client and self-employed. The expert team of professionals at Templeton Brook Witt is able to assist you in preventing any and all HMRC tax investigations and IR35 disputes.
Templeton Brook Witt provides you with the strongest defences by maintaining precise and orderly records, filing your tax returns on time, and clarifying any changes before the inquiry is posed. Having tax investigation insurance in place, along with following the correct processes, can help you save both time and money. It's essential to comprehend the IR35 tax regulations if you're a contractor or freelancer in the UK. If HMRC believes you are misclassifying yourself as self-employed, they may start an IR35 investigation into your tax affairs. Working under the direct supervision and control of a client, receiving a large portion of your salary from that client, not taking on any financial risk, and not having any influence over how you are compensated are all red flags that could result in an HMRC IR35 investigation. To avoid any confusion, you must have a well-written contract that explains your obligations and your relationship with your client, enable Templeton Brook Witt to manage your contracts. Seeking professional advice from tax investigation specialists such as the experts at Templeton Brook Witt can also help minimize the risk of an HMRC investigation and potential penalties. For a free, no-obligation consultation, contact us today!
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Based in the landmark St. Mary Axe, Templeton Brook Witt provide specialist tax investigations, compliance advisory and employment dispute advice to private clients and corporates.
0207 889 1000
info@templetonbrookwitt.com
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London
EC3A 8BF
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