Case Study | Industry: Digital Transformation
From preparation to protection: TPXimpact’s IR35 compliance success
After expert defence from IR35 Shield, TPXimpact satisfied an HMRC off-payroll compliance check, proving their fully contracted-out model and avoiding costly disruption.
Engaging with HMRC on IR35 compliance matters is complex. Having a safe pair of experienced hands is essential. IR35 Shield’s Tax Investigation Service is first class - they led every step of the way to help us demonstrate our compliance to HMRC.
Proving we offer a fully contracted-out service was essential, as it's critical to our business model. Whilst we were confident we had done everything correctly, there is always a worry when HMRC opens a compliance check, so it was very reassuring when HMRC confirmed we were operating compliantly.
Mike Bobroff – Central Operations Director, TPXimpact
About TPXimpact
TPXimpact is a leading digital transformation consultancy, providing innovative solutions to help public, private and third sector organisations deliver better services through design, technology and data.
Operating in the consultancy sector, TPXimpact engages experienced contractors when needed for certain projects. Their model relies on providing customers with a fully contracted-out service, making compliance with IR35 and off-payroll working rules essential.
TPXimpact had begun using IR35 Shields assessment software and consultancy services in preparation for the private sector rollout in April 2021.
The compliance check
In November 2023, HMRC wrote to TPXimpact to open a compliance check to assess their application of the off-payroll rules. As a consultancy, they needed to prove they correctly engaged contractors and adhered to the off-payroll working rules. Potential status misclassification posed significant financial and reputational risks, so having a robust compliance process was vital to demonstrate to HMRC that TPXimpact was operating correctly.
How IR35 Shield helped
IR35 Shield's Tax Investigation Service (“TIS”) promptly took charge of the compliance check, managing all HMRC communications. The team conducted a thorough fact-finding process whilst collaborating with the HMRC caseworker to agree a more refined "Schedule of Information" tailored to the case.
The central dispute was whether TPXimpact’s business model qualified as a fully contracted-out service or if it resembled an employment business, similar to recruitment. Drawing on tribunal-level expertise in employment status, IR35 Shield’s specialist defence team demonstrated that TPXimpact was operating legitimately as a fully contracted-out service provider. Their deep understanding of legislation and case law allowed them to present clear, compelling evidence that TPXimpact was correctly applying the off-payroll working rules.
After reviewing the substantial documentation presented, HMRC confirmed that TPXimpact's systems posed low risk of non-compliance with tax regulations, and HMRC formally concluded they were indeed providing a fully contracted-out service. No further action was required from the company.
Pre-emptive compliance was essential
Along with the protection of our Tax Investigation Service, TPXimpact has always used IR35 Shield’s specialist software for accurate status determinations. The robust assessment process created a clear audit trail, helping to demonstrate reasonable care. Importantly, their contracts were also well-drafted and aligned with their intended business model.
TPXimpact’s internal training was developed in-house, leveraging the many webinars IR35 Shield offers freely on-demand. And, in addition, TPXimpact’s relevant staff also utilised the IR35 Academy.
With IR35 Shield handling the investigation, TPXimpact’s leadership and operational teams were able to remain focused on their core business, ensuring projects and client services continued without disruption.
TPXimpact put in the hard work on off-payroll compliance years ago, and their compliance check shows that when a firm gets their ducks in a row, HMRC will consider them low risk and not give them any further trouble.
Dave Chaplin - CEO, IR35 Shield
Conclusion
There is no one-size-fits-all approach when dealing with HMRC off-payroll compliance checks - there is something different in every case. But, provided the client has done the pre-compliance work and put the groundwork in, these checks are not protracted and can be resolved relatively quickly.
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