This is part five of our serialisation of an IR35 enquiry. To Access the previous parts please visit our IR35 Chronicles Index.
Ten days after Mr Fiddler had written to Mr Turpin, the HMRC status inspector, Turpin soon wrote back rejecting Fiddler's compromise proposal of acting as the go between in communications between HMRC and the end client, BIG IT and the agency, Opportunity Knocks.
Turpin explained that he had numerous questions that he wished to pose to the end client and, in his wide experience, there was normally supplementary questions borne out of answers given. It was therefore easier, efficient and less time consuming for such questions to be asked during a face-to-face meeting, something which Turpin had neglected to mention when he originally asked for contact details.
Turpin again repeated his request for a copy of the upper level contract and the relevant contact name(s) and addresses and telephone numbers and looked forward to receiving the information within fourteen days of his letter.
“Mr Turpin was notorious…a maverick”
Mr Fiddler had recently attended his local institutes' seminar on 'IR35 Update' and had learned, from chatting to a few of his counterparts, that Mr Turpin was notorious and had earned himself a reputation of being a man on a mission, a maverick. He was told that if he had a client that was undergoing a status enquiry and Turpin was involved, then he and his client should expect to be in it for the long haul.
Fiddler soon began to doubt his own assessment that the IR35 enquiry would be over within six months. From the tales he had been told, Turpin was a tenacious, belligerent, pedantic, single-minded, very experienced and battle hardened status inspector who had an impressive track record of successful outcomes in status enquiries. Due to his reputation and surname he had earned himself the nickname of 'The Highwayman'.
The day after the seminar Mr Fiddler had contacted Neil to share his newly acquired information about their adversary. Naturally, Neil was concerned and even more so when his accountant informed him that the enquiry was more than likely to exceed his original estimate of six months.
Although Fiddler maintained that he still believed that his client had a good case, with which Neil concurred , doubts were beginning to creep in. The longer this matter took to resolve the more BSOD Ltd would incur professional fees and unwanted distraction for Neil who was about to embark on a new contract his company had recently secured which was likely to be highly profitable. Neil, however, resigned himself to the facts and adopted a philosophical attitude for the time being at least.
The pair then went on to discuss Turpin's latest correspondence with Fiddler asking Neil how he felt about the status inspector being allowed direct access to representatives of both BIG IT and Opportunity Knocks. Needless to say, Neil was not too enamoured with the idea and asked his accountant if there was any way of preventing or deterring Turpin from taking such action. Unfortunately, one way or another the Revenue were within their legal rights to seek information from third parties where it affected a taxpayer's income tax affairs, so there was no getting around that fact.
What Fiddler had to do was to protect his client’s interests as best he could. Realising that the time had come to seek expert outside assistance, Mr Fiddler suggested that he contact ProtectTax, a firm of tax consultants that specialised in tax enquiries and, in particular, employment status matters.
Neil too had come to the realisation that his accountant, whom he respected and trusted, had limited knowledge and experience of IR35 and that he needed someone else in his corner. He therefore instructed Fiddler to proceed but not to give final instructions of appointment before obtaining Neil's consent.
The accountant then asked Neil if he had a copy of the contract between the agency and BIG IT. This was responded to in the negative, as Neil explained this was a confidential document and therefore not for his eyes. Fiddler asked if there was any possibility of obtaining a copy. This was unlikely as BSOD Ltd were only a third party to the contract. Although it was most likely that a request for a copy of the document would be denied, Neil nevertheless said he would approach the agency and make the appropriate inquiries.
The conversation was then brought to a close with the pair agreeing to e-mail one another with the results of their individual tasks within the next few days. Neil expressed concern as to whether or not there would still be enough time to respond to Turpin given that he had stipulated that he wanted a response within fourteen days but his accountant assured him that the status inspector was being completely unreasonable in only allowing such a short period of time and that thirty days was the normal protocol and that he intended to remind Turpin of this.
Next week: Help is at hand, the cavalry is on its way.