IFAs have been warned to beef up their fact-finds or risk misadvising self-employed clients under new tax rules, according to tax experts.
Tax specialists Taff Associates has warned that, under the new IR35 regime introduced last month, small to medium enterprises such as IFAs are vulnerable to criminalisation if they make mistakes on tax return forms.
Changes to taxation compliance also mean fact-finds will need to be more thorough to avoid misadvising individuals who are self-employed but are not aware they now fall into this category.
IR35 has been designed to clamp down on tax and National Insurance avoidance and is expected to affect about 50,000 companies across a range of sectors.
Taff is running a series of seminars to help small businesses understand the impact of IR35.
Armstrong Neal Financial Solicitors partner Gareth Fatchett says IFAs are not yet familiar with the issues surrounding IR35.
Fatchett says: “There is a lack of awareness among IFAs. For example, not many know that the contract for services involves the self-employed but contract of service does not.”