Contractors faced with an IR35 enquiry often appoint an IR35 specialist to assist and represent them for the duration of the investigation. Invariably they already have an accountant who is a general practitioner, not possessing the requisite expertise in IR35 matters, but nevertheless vital to maintaining a freelancers tax and accountancy affairs.
When appointing an adviser it is necessary for a contractor to sign an authority, usually form 64-8, enabling HMRC to discuss their tax affairs with the new temporary agent. This, however, tends to cause confusion in the ranks of the Revenue as they mistakenly believe that a form 64-8, signed in favour of the IR35 specialist, signals the appointment of a new agent in respect of the contractors' general tax affairs, even when they are specifically told this is not the case. HMRC have been known to issue the IR35 advisor with PAYE and/or corporation tax correspondence relating to the contractors' affairs months after an enquiry has been resolved, causing inconvenience to freelancer, accountant and adviser alike.
Form Comp01 should now end those niggling problems. This document will help to ensure that HMRC records are not amended incorrectly by cancelling an existing authorisation, e.g accountant, or to show a temporary adviser as a permanent one.
The form gives the taxpayers written consent to HMRC to exchange and disclose information relevant to a compliance check with the named adviser. It only relates to the compliance check itself and to the period(s)/year(s) entered on the form and covers all matters being checked by the Revenue.
If HMRC extends the period of the compliance check then Comp01 covers that too unless the taxpayer instructs HMRC not to.