Contractors' Questions: How to fill in confirmation of arrangements template?

Contractor’s Question: My client has responded to my request for a confirmation of arrangements document by providing what looks like a template. From searching online, it appears that such templates are on the websites of IR35 advisories as part of the free resources they offer.

Is this template respectable enough in the taxman’s eyes for my purpose of confirming the commercial nature of the relationship between my PSC and the client? Secondly, how heavily should I amend the template? Is it the case that the more information one adds, the more information HMRC has to dispute? Or should I insert as many details of my working reality as possible, to show I’m not controlled or subject to other factors suggestive of IR35?

Expert’s Answer: I cannot speak for other IR35 advisories, but the Confirmation of Arrangements template we provide online is tried and tested in IR35 enquiries, so it is more than sufficient for your purpose.

If you are including extra information that would be viewed positively in an IR35 enquiry – and your end-client is happy to sign – then I would have no hesitation in adding it in. HM Revenue & Customs leaves no stone unturned when it comes to IR35 so the more you can clarify in advance the better. It will also go some way to negating the inspector’s need to speak to your end-client directly on those points, which would save a lot of time and worry.

We have seen the CoA document used countless times in investigations and it has certainly never proven to be counterproductive. It is perfectly acceptable as evidence and HMRC would have no grounds to suggest that the details were ‘too good to be true.’

The expert was Seb Maley, operations director at Qdos Consulting, an IR35 advisory for freelance and contract professionals.

Wednesday 30th July 2014