A query from a client:
“I have a question regarding contract reviews and tax investigation insurance, which I hope you can help me with.
“In recent months I have found myself with insufficient time to get a contract reviewed in the time that the client/agent will allow for a decision from me. As a result, I have been a straight choice between working to an un-reviewed contract, or not working at all – not much of a choice these days. Indeed, I am in a similar situation right now, in that I have a contract, but not yet the full schedule, with a potential start date of next Monday.
“However, I am concerned that if I don’t get the contract(s) reviewed, then I am at risk of not being covered for costs incurred in the event of a tax investigation. Am I justified in this concern?”
And our reply:
“Its a common misunderstanding, but we actually don’t offer a pre signature contract review service for clients, inter alia not having had a contract reviewed before you start isn’t a problem. There is no obligation, for insurance (which I presume you have through us) or for HMRC, to have a contact checked. That said, we will happily review a contract pre signature if there time allows.
“Where the advantage in a review lies is due diligence in proving to HMRC you have been ‘responsible’ in running your tax affairs in the event of inspection, and in assisting you in building up a portfolio of evidence viz IR35 status.
“In many ways a contract review is best done once you’ve started the contract, as IR35 status is based more on the actual execution of the contract / working practices than the written contract in any event, and you are better placed to comment on these once you have started the contract.”