IR35 Chronicles IX

This is part nine of our serialisation of an IR35 enquiry. To access the previous parts please visit our IR35 Chronicles Index.

No time was wasted by IR35 expert Dee Fender in sending an e-mail to Ms Fiona Pilkington, head of procurement at BIG IT. In it, Dee introduced herself and provided the relevant basic history of Neil's IR35 enquiry to date.

She briefly explained the IR35 legislation and the practicalities of an IR35 enquiry and how third parties were compelled to provide HMRC with certain information and the penalties for refusing to do so.

Dee urged Ms Pilkington  to support her client by initially allowing Graham Hargreaves, the Project Manager, to complete the 'Statement of Working Practices' and warned against meeting with Mr Turpin of HMRC, suggesting that it would be more beneficial for all parties to confine contact with the Revenue to correspondence.

Several days passed and Dee Fender had received no response to her e-mail, prompting her to send a further e-mail reiterating her and Neil's gratitude if Ms Pilkington would consent to offering BIG IT's valued assistance. Despite this, it appeared that Dee was being given the cold shoulder. Mrs Fender therefore attempted to contact Fiona Pilkington by telephone. After leaving several messages on Ms Pilkington's voicemail, Dee eventually got to speak to the lady only to be told that her request was being given consideration and that Dee would be notified of her decision in due course.

After a month of no activity Mrs Fender then received a letter from Mr Turpin. In the letter Turpin informed her that he had now received a copy of the upper level contract between BIG IT and Opportunity Knocks, the agency, which had been provided by the end client. No copy of the contract was enclosed with the letter as Turpin explained that BIG IT had specifically requested that this should not be seen by any third party due to its confidential nature.

He went on to explain that he had numerous questions surrounding the contractual terms and the actual working arrangements. To save time, he believed it would be less time consuming for everyone concerned if held a meeting with the relevant officers at BIG IT to discuss these issues. With this in mind, he had written to Fiona Pilkington to seek her agreement to such a proposal and would keep Dee Fender informed when there was something of substance to report.

The tax advisor immediately contacted Turpin to request that if any meeting did go ahead between HMRC and BIG IT, then both herself and her client should be present as, after all, it was the affairs of BSOD Ltd that they would be discussing and the pair had more than a vested interest. Whilst he himself had no objection to them being present, he deflected the request by stating that he would need to seek permission from BIG IT before this could happen. Although not entirely happy with the situation Dee Fender decided to accept it for the time being.

Following her conversation with Turpin, Dee telephoned Neil to update him on the latest developments. She told Neil that she would use her best endeavours to dissuade Ms Pilkington from agreeing to a meeting with HMRC but, failing that, to persuade her to allowing them to attend any such meeting.

Another string of e-mails was sent by Mrs Fender to Fiona Pilkington, again warning about the pitfalls of accepting an invitation to meet with the Revenue and explaining the advantages of dealing with such matters strictly by correspondence. Dee's efforts however were met with a wall of silence.

A month passed by before Dee Fender received another letter from Mr Turpin which delivered the blow she had been dreading. Fiona Pilkington had decided to accept Turpin’s invitation and a meeting date had been set for several weeks time. Furthermore, BIG IT had rejected Dee's request to attend the meeting. As there would be matters of confidentiality and sensitivity that would be discussed, there could be no question of any third party being privy to such discussions.

A few days after receiving the bad news from Turpin, Mrs Fender received an e-mail from Fiona Pilkington formally notifying her that Graham Hargreaves would not be permitted to complete the 'Statement of Working Practices' and furthermore this document would not be completed by anyone else at BIG IT. As the end client was assisting HMRC by providing information during the enquiry , Ms Pilkington did not consider it necessary to continue corresponding with Neil's tax advisor.

Dee Fender dispatched an immediate fax to Mr Turpin requesting that, as she was being denied admittance to the forthcoming meeting, then the very least he could provide was a copy of the agenda and proposed questions. It only took Turpin a day to respond by fax stating that there was no specific agenda and that, as it was likely that supplementary questions would arise out of their discussions, he saw no point in providing a list of questions.

Next week:  More gloom on the horizon