Why is it important to monitor an engagement?

Dave Chaplin, CEO of IR35 Shield talks about why it's imperative to monitor an engagement.

There are two reasons to monitor an engagement. The first is to detect if the IR35 status changes, and the second is to collate evidence along the way which may be useful later.

When contracts are a longer duration, sometimes the parties can take their eye off the IR35-ball, so to speak, and the contractor might start becoming part of the corporate furniture and the relationship can turn into one more akin to employment.

And because the client now holds the tax risk, the last thing they want is to find out that a few months ago the status changed, it had not been noticed, and the whole position from then needs to be corrected and reversed out, with all the extra tax costs associated with that. Prevention is always better than cure, and these things are best discovered and dealt with when they happen.

The other aspect is evidence gathering. The contract itself and the associated status determination statement, or SDS, is the intent of the parties, rather than the actual conduct. Also, some facts cannot be ascertained until events actually take place - which will help complete the full fact-pattern required to defend status at a later date if HMRC come knocking, but which time the contractor may be long gone.

So, that’s monitoring. We are checking and recording events, to protect the status position.

If you need help with your assessment regime then please book a demo of IR35 Shield