IR35 investigations have historically been triggered directly by HMRC campaigns into specific sectors.
Currently, a compliance review by HMRC into any other aspect of company tax – such as corporation tax, VAT or PAYE – could lead to a company being passed over to the HMRC IR35 team. HMRC have stated that, after the legislation change in April 2021, no retrospective reviews will be carried out. However, it’s not clear if this will be an established policy.
As things stand, an IR35 enquiry window is twelve months, from the date you file your last self-assessment return (or corporation tax return). HMRC can only trigger a discovery assessment enquiry outside this 12-month window, under certain circumstances. These include if they suspect there has been a potential loss of tax due to careless or deliberate behaviour, or if they didn’t have full information when the enquiry limit expired.