An IR35 process review assesses how your business engages with Personal Service Companies (PSCs) and manages off-payroll working rules. It’s important because misalignment between documented procedures and actual working practices can expose your business to financial penalties and reputational risk.
IR35 Process Reviews
Identifying and managing risk for IR35 best practice
Many businesses who fall foul of IR35 don’t do it on purpose; they have the best intentions with processes in place to assess Personal Service Companies to determine IR35 status. The challenge comes when those documented processes and the real-life working practices are not aligned, which is often only evident once an extensive deep dive is made through a comprehensive review of your IR35 processes.
At Linx, we specialise in helping organisations safeguard against IR35 risks through in-depth, practical process reviews. Our approach is built on years of hands-on industry experience, a thorough understanding of HMRC’s latest guidance, and a strong grounding in relevant case law.
Through our IR35 process review service, we’ll assess the prescribed, perceived and actual processes your business has in place around the engagement of Personal Service Companies. Your prescribed processes will be well-documented in internal procedures and often contractual terms. Still, it’s also important to understand how these are perceived by decision makers involved in IR35 determinations, as well as the contingent workers. We’ll then look at the actual processes that are in place for engaging contingent labour, and how IR35 is managed on a day-to-day basis. This can identify disconnects, where more clarity is needed or further training is required. Where your actual processes differ significantly from your documented processes, this carries unwanted risk.
Drawing on industry expertise to review IR35 processes
Our team brings deep sector knowledge, having supported businesses of all sizes and complexities in navigating the evolving IR35 landscape. We understand the practical challenges faced by HR, procurement, legal and finance teams in managing off-payroll engagements. This means our reviews are tailored to your operating environment, not just generic checklists.
We assess your documented procedures, decision-making processes, and records against HMRC best practice, ensuring your approach stands up to scrutiny in the event of a compliance check or enquiry. By comparing your intended procedures with real-world practices, we highlight any gaps or inconsistencies that could expose your business to risk.
Understanding the risks of getting IR35 processes wrong
Failing to comply with IR35 regulations, even with the best intentions, can have serious and far-reaching consequences for both businesses and individuals. HMRC takes non-compliance seriously, and the risks extend beyond immediate financial costs to include reputational damage and operational disruption.
The financial impact of IR35 non-compliance can be substantial. If an engagement is found to be incorrectly assessed as outside IR35, HMRC can issue demands for unpaid tax and National Insurance contributions (NICs) based on the deemed payment calculation. We help you identify where your processes align with, or diverge from, the principles established in tribunal and court decisions to avoid these unwanted financial penalties.
Demonstrating reasonable care with your IR35 processes
Taking reasonable care means carrying out thorough and well-documented status determinations for each engagement, issuing clear Status Determination Statements, and ensuring processes are regularly reviewed and updated. This also extends to how businesses manage IR35 processes within their supply chain. Organisations that can demonstrate reasonable care will have substantial evidence to present to HMRC if challenged.
Being proactive, maintaining robust processes, and regularly reviewing your IR35 compliance with the support of an independent consultant are the best ways to protect your business from the costly and disruptive consequences of non-compliance.
Supporting your business with IR35
Alongside our supply chain audits, we provide a comprehensive suite of IR35 support services that help ensure your business is confident you have a robust IR35 strategy.
staff training
Empower your team with bespoke IR35 staff training – tailored to your business, delivered by experts, and designed to ensure compliance and reduce risk.
Supply chain audits
A detailed evaluation of your supply chain is essential to understand IR35 implementation, examine engagement models, and confirm that your recruitment providers are operating compliantly.
risk profiling
To meet IR35 obligations, it’s essential to assess the nature of engagement with PSC workers who contribute to your operations.
Frequently asked questions about our IR35 process reviews
What is an IR35 process review, and why is it important?
Who should be involved in an IR35 process review?
Typically, HR, procurement, finance, and legal teams are key stakeholders. Anyone involved in contractor engagement or IR35 determinations should be included to ensure a comprehensive review.
How does Linx tailor the review to our business?
We don’t use generic checklists. Our team draws on deep sector experience to understand your operating environment, business structure, and contractor engagement models. This ensures the review is relevant and actionable.
Can Linx help us demonstrate reasonable care to HMRC?
Our review provides documented evidence that your IR35 processes have been independently assessed and highlights areas for improvement. This can help you build a defensible position in the case of an HMRC enquiry.
How often should we review our IR35 processes?
We recommend reviewing your IR35 processes annually or whenever there are significant changes in legislation, business structure, or contractor engagement practices.
Do we need to engage an external advisor for an IR35 process review?
No, not necessarily, but it’s important to consider how comprehensive your review will be if it is completed internally. Businesses often find that engaging an external advisor provides perspective they can’t find within their own business, when stakeholders may already be too close to existing processes. Our Linx team will also draw on their industry knowledge and HMRC’s latest guidance and established case law, so you’ll be sure that every angle is considered.
How much does it cost to undertake an IR35 process review?
We offer a free initial consultation to understand your existing operations and approach to IR35, and then we’ll provide clear and transparent pricing which you’ll be able to review before we commence with any work.
How long will the IR35 process review take?
We’ll be able to give you timescales for the review alongside when you can expect the report and key findings when we discuss your requirements, but we pride ourselves in delivering a responsive service.
We recently faced some challenges in a Workforce Assured audit due to issues with our IR35 approach – can this service help?
It certainly can, and we’re experienced with helping clients understand where their audits fell short and the gaps in their IR35 processes. You’re welcome to get in touch with us to discuss your recent audit, and we can suggest next steps to rectify identified issues.
What happens after the review?
You’ll receive a detailed report outlining areas of alignment and divergence, risks and recommendations, as well as training and process improvements needed.
We can also support you in implementing changes and training your teams.
Is this service suitable for all businesses or only large organisations?
Our IR35 process review is scalable. We’ve worked with businesses of all sizes, adapting our approach to suit your resources and complexity.
If you’re considering your IR35 implications as a small business, it’s important to review HMRC’s IR35 small business exemption, which may mean you do not need to make provisions.
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