Safeguard Your Business with an IR35 Compliance Audit
Assess your IR35 exposure with expert-driven analysis. Understand your risk profile, potential penalties, and the steps needed to achieve full compliance - before HMRC comes knocking
- Personalised IR35 risk analysis based on your contractor footprint
- Clear breakdown of potential tax liabilities and penalties
- Actionable recommendation from compliance experts
- Prevent costly fines with audit-ready classification records
Trusted by teams from SME to Enterprise
Assess your Compliance Risk
Provide details about your organisation to receive an estimate on your compliance risk
Liability Risk Assessment
How is Potential Liability Calculated?
Based on your contractor workforce, we dynamically calculate potential liability by analyzing total annual spend, estimating spend at risk, and projecting potential tax liabilities and penalties across multiple compliance scenarios.
Careless Non-Compliance
An inaccuracy is careless if it is "due to failure by the client to take reasonable care" when completing status determinations. Examples of reasonable care: Keeping accurate, systemised records, checking when an engagement changes, checking uncertainties with a professional adviser or skilled individual.
Deliberate
If HMRC determines that an organisation's off-payroll status decisions were made deliberately incorrectly—albeit transparently—it will pursue a penalty
Deliberate & Concealed
Where deliberate non-compliance with the off-payroll working rules is also concealed—e.g. false records to disguise a worker's true status—HMRC will apply the highest penalties.
Understanding IR35 Risk
Why IR35 Compliance Matters More Than Ever
The regulatory landscape has fundamentally shifted. HMRC's enforcement activities have intensified dramatically, making robust IR35 compliance essential for protecting your organisation's future.
Off-Payroll Working Rules (IR35)
HMRC's IR35 legislation determines whether contractors should be treated as employees for tax purposes. Misclassification can result in substantial backdated tax liabilities, National Insurance contributions, and penalties.
Increasing HMRC Enforcement
HMRC has significantly intensified its compliance activities, with dedicated teams focusing on off-payroll working arrangements. The tax authority now uses sophisticated data analytics to identify non-compliant organisations.
Financial Consequences
Beyond immediate penalties, non-compliance can trigger comprehensive reviews of past arrangements, resulting in years of backdated liabilities, interest charges, and potential criminal prosecution for deliberate non-compliance.
Reputational Impact
HMRC investigations often become public knowledge, particularly for larger organisations. This can damage relationships with contractors, clients, and stakeholders, whilst creating lasting reputational harm in your sector.
Did you know?
HMRC can retroactively assess liabilities for up to 6 years - and penalties for careless or deliberate misclassification can exceed your original contractor spend.
HMRC Investigation Process
What Happens When HMRC Investigates
Understanding the investigation process is crucial. HMRC's approach is systematic, thorough, and can have devastating financial consequences for unprepared organisations.
Formal Letter of Investigation
HMRC sends a formal letter requesting comprehensive information about your workforce and service provider arrangements. This is not a routine check - it's the start of a detailed compliance review.
Data Collection Requirements
You must collate extensive data on all contractors, including classification processes, contracts, working arrangements, and payment history. This can involve hundreds of documents and months of work.
Comprehensive Review Period
HMRC conducts thorough analysis of your classification decisions, often going back 6 years. They examine contracts, working practices, and financial arrangements in detail.
Potential Penalties & Liabilities
If misclassification is found, you face backdated tax liabilities, National Insurance contributions, interest charges, and penalties that can exceed your original contractor spend.
What You Need to Do Now
Don't wait for HMRC to come knocking. Take proactive steps to protect your organisation from costly investigations and penalties.
Time is of the essence
HMRC investigations can take months or years to resolve, during which time your business operations may be severely disrupted. Early preparation is your best defense against costly penalties and reputational damage.
Platform Benefits
Transform Your Compliance Approach
CoComply's intelligent platform eliminates guesswork and manual processes, delivering enterprise-grade compliance automation that scales with your business.
Intelligent Classification Engine
Advanced AI algorithms analyse working arrangements against HMRC guidelines, providing accurate IR35 determinations with comprehensive supporting evidence and reasoning.
Real-Time Compliance Monitoring
Continuous oversight of your contractor ecosystem with intelligent alerts, automated reviews, and proactive risk identification to maintain compliance as your business evolves.
Audit-Ready Documentation
Comprehensive audit trail with timestamped decisions, supporting evidence, and detailed reasoning provides robust defence against HMRC challenges and investigations.
The Compliance Landscape Has Changed
Track the rapid evolution of IR35 enforcement and understand why compliance is more critical than ever
Off-Payroll Rules Extended
Medium & large companies became responsible for making IR35 determinations, shifting liability from contractors to engagers
First Year Adaptation
Businesses adapt to new rules with initial compliance efforts and status determination processes
HMRC Enforcement Intensified
Investigations increased with sophisticated data analytics capabilities targeting systematic non-compliance
Heightened Scrutiny
Sector-wide compliance campaigns and automated detection systems target entire industries for comprehensive review
AI-Driven Enforcement & Reforms
HMRC uses AI and big data for real-time detection of non-compliance. Legal cases emphasise contract and practice scrutiny. The CEST tool was updated, and reforms introduced to reduce double taxation risks.