This is part seven of our serialisation of an IR35 enquiry. To Access the previous parts please visit our IR35 Chronicles Index.
IR35 expert Dee Fender wasted no time in sending out an introductory letter, accompanied by a letter of engagement and form 64-8, to BSOD Ltd. Neil was impressed by the speed and efficiency at which Mrs Fender had reacted and returned all relevant correspondence, duly signed and dated, with equal promptness.
Although Mr Fiddler had arranged for all copies of relevant correspondence to be sent to Mrs Fender, Neil also provided his own version of events via e-mail and telephone conversation to her as well.
After speaking with the lady, Neil felt a sense of reassurance that he was in capable hands and was confident that his company would be expertly defended. Mrs Fender had explained to Neil her common strategy and approach in employment status and, in particular, IR35 enquiries; she was always firm in her dealings with HMRC, avoiding, where possible, to be overly aggressive but preferring to reason and negotiate with Revenue officers and inspectors. If she came up against stubbornness then she could play that game with equal aplomb.
A day or two after receiving the necessary documentation back from Neil, Dee Fender wrote to Mr Turpin at HMRC to formally notify him that ProtectTax would be representing BSOD Ltd for the remainder of the IR35 enquiry and to remind him that he had no right to demand responses to his letters within fourteen days when it was common protocol to allow thirty days.
She accepted that the only way the Revenue was likely to obtain a copy of the upper level contract was to formally ask for this themselves and she therefore offered up a contact name at Opportunity Knocks, the agency, to whom Turpin could make his request.
Mrs Fender did not, however, provide a contact name at BIG IT as she needed to buy herself and her client a little time and breathing space. Instead, she suggested that, as a good starting point to verifying the working arrangements, i.e. the way in which the contractor actually worked on a day-to-day basis, a document called a 'Statement of Working Practices' be completed, signed and dated, by both the end client and contractor.
The 'Statement of Working Practices' contained a list of questions that addressed all the salient aspects of employment status and how they related to the way the contractor worked. The questions themselves simply required either an option to be selected by deleting other options or to simply insert a word(s). It was necessary for the both the contractor and end client representative to fill in the document together and once finalised it would be signed and dated by both parties. The document would then serve as a witness statement and testimony to the actual working practices of the contractor.
In an attempt to make her proposition more appealing to Turpin, Mrs Fender explained to the status inspector that if, upon receiving the 'Statement of Working Practices, he had supplementary questions then these could be put in writing to the end client. What Dee Fender wanted to avoid, at this stage of the enquiry, was Turpin being given unbridled access to the end client where he was free to ask a whole manner of leading questions designed to steer an unsuspecting individual into unwittingly painting a picture of employment albeit disguised employment.
Mrs Fender concluded her correspondence by stating that her client was willing to fully co-operate with HMRC and this extended to any further meetings Turpin may wish to hold with Neil and his new representative.
In the meantime she had e-mailed a blank 'Statement of Working Practices' to Neil and tasked him with getting it completed and signed off. Regardless of whether or not Turpin was prepared to accept the document, Fender knew that, should this case ever have to be decided in a tax tribunal, it would be viewed as credible evidence by a tribunal judge.
Armed with the 'Statement of Working Practices', Neil spoke to his Project Manager at BIG IT during the period of enquiry, a Graham Hargreaves. Graham and Neil had enjoyed a good working relationship and both had mutual respect for one another. Although Graham was more than willing to complete the document he, like all other managers, were under strict instructions to refer all requests for information to BIG IT's legal procurement team.
On no account was a BIG IT employee to act as a spokesperson for the company without first receiving clearance from legal procurement. Neil knew that this team were ultra-cautious and always took time in deliberating over information requests where they thought BIG IT could be implicated and held accountable.
Next week: Turpin is not for turning.
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