My question relates to law enforcement for freelancers. Are there inspections of freelance workers in the UK, that is, do HMRC agents visit freelancers’ homes to check their bookkeeping records?
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"Possibly on an audit basis, but not regularly" is my guess– Chris ForrenceOct 15, 2014 at 11:12
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1 Answer
YES! and YES! The HMRC (Her Majesties Revenue and Customs) has a very formal method of analysing freelancer self-employed or agency supplied personnel or small one man companies providing services to other companies.See www.hmrc.gov.uk/ir35/ if IR35 applies then you can be 'deemed' an employee and the employee tax rules apply. Theyare looking for folk who pay themselves by dividend rather than taxed wages to avoid high tax rates and Employer's National Insurance and employee's National Insurance Taxes, so they are looking at the avoidance issue and can audit your books if they think their is a case to answer. Sometimes they just send a tax bill and you need to defend that it is unrealistic and a few go to court. Use your search engine on "IR35" will give you loads of data.
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Relevant (recent, authoritative) link: gov.uk/ir35-find-out-if-it-applies– AmeliaMay 13, 2015 at 10:27