Contractor Tax Health Check 2026/27 | HMRC Enquiry Risk Profiler | Contractor UK

Tax Investigation Risk Profiler

Contractor Tax Health Check 2026/27

Answer a few questions about your limited company and see where you may stand against known HMRC enquiry triggers — salary and dividends, your director loan account, expenses and IR35 — with recommendations you can take to your accountant.

2026/27 rates and thresholds 8 or 14 questions Runs in your browser — nothing is sent to us Advisory only · not tax advice

Quick assessment

A high-level risk signal from the key questions.

8 questions~3 minutesRisk signal + recommendations

Company financials

What was your company's annual turnover for the last financial year?

This sets the scale of your operation. Turnover bands are one factor in risk profiling, and turnover also drives the VAT registration test — £90,000 on a rolling 12-month basis in 2026/27.

Annual turnover

Gross revenue before expenses

Income extraction

What annual salary do you pay yourself as a director?

HMRC looks at the balance between salary and dividends. For 2026/27 the personal allowance is £12,570, the NIC primary threshold is also £12,570, and employer NIC of 15% applies above the £5,000 secondary threshold. Salary above the £6,708 lower earnings limit earns a qualifying year for the state pension.

Annual director salary

The personal allowance is £12,570 for 2026/27

Income extraction

What was the total dividend amount you took from your company last year?

Combined with salary this shows your total extraction. For 2026/27 the dividend allowance is £500 — a nil-rate band that uses up part of your basic-rate band rather than a deduction — and dividends above it are taxed at 10.75%, 35.75% or 39.35% depending on which band the top slice falls in.

Total dividends taken

Dividends declared and paid in the financial year

Director loan account

What is the current balance of your director loan account?

An overdrawn DLA — where you owe the company money — is one of the most common enquiry triggers for owner-managed companies. Section 455 tax applies to a loan from a close company that is still outstanding 9 months and 1 day after the year end: 35.75% for loans made on or after 6 April 2026, and 33.75% for earlier loans, because the rate follows the loan date.

In credit (company owes me money)

Zero or minimal balance (within £1,000)

Overdrawn by less than £10,000 (I owe the company)

Overdrawn by more than £10,000

I'm not sure / I don't track this

Expenses

What percentage of your turnover do you claim as business expenses?

Expense ratios well outside the norm for your sector invite questions. This tool treats 10–20% as the normal band for a one-person consultancy; HMRC's Connect system cross-references third-party data and can flag outliers.

Less than 10% of turnover

10-20% of turnover (normal band)

20-30% of turnover

More than 30% of turnover

Working pattern

How many different clients did you work for in the last tax year?

Single-client contractors attract more attention on IR35 and employment status. Several clients points to genuine business diversity and reduces status risk.

Just one client all year

2-3 clients

4 or more clients

IR35 status

What is your IR35 status for the majority of your work?

Your status affects how HMRC reads your working practices. An inconsistency between the status you claim and the way you actually work is a key trigger. For 2026/27 the off-payroll small-company test is still £10.2m turnover / £5.1m balance sheet / 50 employees.

Outside IR35 — operating as a genuine business

Inside IR35 — taxed at source via PAYE

Mixed — some contracts inside, some outside

I'm not sure of my IR35 status

Company history

How long has your limited company been trading?

Newer companies extracting high profits tend to attract more scrutiny. An established filing history demonstrates consistent practice.

Less than 2 years

2-5 years

More than 5 years

Expense claims

Do you claim use of home as office expenses?

HMRC accepts reasonable home-working claims but scrutinises large ones. You can claim the flat rate (£6 a week, no evidence required) or a proportion of your actual costs with a documented calculation.

No — I don't claim home office expenses

Flat rate only (£6/week or £26/month)

Calculated proportion — under £1,500/year

Calculated proportion — over £1,500/year

Expense claims

How do you handle vehicle and travel expenses?

Vehicle costs are a standing HMRC focus. The approved mileage rate for cars and vans rose for 2026/27 — its first move since 2011/12 — to 55p for the first 10,000 business miles, then 25p, backdated to 6 April 2026. Company cars and fuel create P11D and benefit-in-kind obligations.

No vehicle claims — I use public transport or don't travel

Mileage allowance at HMRC approved rates

Company car (reported on P11D)

Company leases or owns the vehicle

Compliance history

Have you or your company ever been subject to an HMRC enquiry?

Previous enquiry history can affect future risk. A company that has been looked at before may get more attention, particularly if adjustments were needed.

Never been investigated

Yes — enquiry closed with no issues found

Yes — minor adjustments were required

Yes — significant tax was owed

Tax reliefs

Have you claimed R&D tax relief in the last 3 years?

R&D relief is legitimate but heavily scrutinised. HMRC has a dedicated compliance unit reviewing claims, particularly from smaller companies, and a claim must show an advance in science or technology.

No — never claimed R&D relief

Yes — claim prepared by specialist or accountant

Yes — claim prepared without specialist advice

Record keeping

How are your company accounts prepared?

Properly categorised, professionally prepared accounts reduce errors and enquiry risk. HMRC's automated checks pick up common filing inconsistencies.

Prepared and filed by a qualified accountant

I use accounting software and file myself

Manual records / spreadsheets, file myself

VAT

What is your VAT registration status?

Registration is compulsory once rolling 12-month taxable turnover exceeds £90,000 (unchanged for 2026/27), or if you expect to pass it in the next 30 days alone; the deregistration threshold is £88,000. Flat Rate Scheme users face specific scrutiny under the limited cost business rules.

Not VAT registered (turnover below threshold)

Standard VAT scheme

Flat Rate Scheme

Not registered but turnover exceeds £90,000

Your risk profile

Based on the information you provided, using 2026/27 rates and thresholds.

Use these findings as a starting point for a conversation with your accountant — not as a final assessment.

Risk score — out of 100, higher is better--

Calculating…

Your results are being generated.

How you compare

You

Reference profile

Higher scores mean lower apparent risk. The 75 line is this tool's own reference profile for a well-run contractor company, not a published HMRC statistic.

Connect analysis

How your profile may look to data-matching systems

Risk by category

Your priority action plan

Detailed findings & recommendations

Key tax deadlines 2026/27

Corporation Tax payment

9 months and 1 day after your year end

Check your dateDepends on year end

Company accounts filing

9 months after your year end

Companies HouseLate filing penalties apply

Self Assessment

Online filing and balancing payment

31 Jan 2027Next filing deadline

P11D and P11D(b)

Benefits and expenses for 2026/27

6 Jul 2027Annual — 6 July

Want expert guidance?

Talk to a specialist contractor accountant who can review your actual figures rather than a questionnaire.

Find a contractor accountant

Understanding this assessment

What this tool does not assess

This tool gives a risk indication based on common patterns. It does not and cannot:

Replicate HMRC's own risk assessment methodology or its Connect system
Access your actual tax returns, bank accounts or HMRC records
Account for all sector-specific factors
Analyse the detailed content of your individual expense claims
Consider complex corporate structures or overseas elements
Assess R&D claims, VAT schemes or other specialist areas in depth
Provide any guarantee of investigation or non-investigation

For a comprehensive review, consult a qualified accountant with contractor experience.

How is the risk score calculated?

Your score is a weighted average of five category scores, weighted to reflect publicly documented HMRC enforcement patterns:

Salary and dividend balance (25%): how your extraction compares with the 2026/27 personal allowance, NIC thresholds and dividend rates
Director loan account (25%): weighted heavily because an overdrawn DLA is one of the most common compliance-check triggers for owner-managed companies
Expense patterns (20%): measured against the 10–20% band this tool treats as normal for a one-person consultancy
IR35 and working patterns (15%): cross-referenced with your stated working arrangements for internal consistency
Company profile (15%): trading age, turnover and client diversity

Higher scores indicate lower apparent risk. The 75/100 comparison line is this tool's own reference profile for a well-run contractor company — it is a modelling assumption, not a measured HMRC statistic, and no enquiry-probability figure is quoted anywhere on this page.

Sources & methodology

The risk factors are drawn from publicly available material, including:

HMRC's Compliance Handbook and Tax Compliance Risk Management manual
HMRC's Directors' Loan Account Toolkit guidance
Published gov.uk rates, allowances and thresholds for 2026/27
Tax tribunal decisions and documented case law patterns
Published professional body guidance (ICAEW, CIOT, ATT)

The weightings are ours, not HMRC's. HMRC does not publish its internal risk methodology, so the result is indicative only and no attempt is made to estimate your probability of enquiry.

Privacy

We do not store, collect or transmit any of your answers. All processing happens locally in your browser using JavaScript. Your data never leaves your device.

Disclaimer

This tool is not affiliated with, endorsed by, or connected to HMRC or any government body. It is provided for general informational purposes only. The output does not constitute an employment status determination, legal advice, tax advice, or professional advice of any kind and must not be relied upon as such. Results may differ significantly from HMRC's actual assessment or tribunal findings.

Legal

To the fullest extent permitted by law, ContractorUK, Rocky-Messissi Limited, its directors, employees, and affiliates accept no responsibility or liability whatsoever for any loss, damage, or adverse consequence arising from the use of this tool or reliance on its output, whether direct, indirect, incidental, or consequential. By using this tool, you acknowledge that you do so entirely at your own risk and that the output is indicative only. Users must seek independent professional advice from a qualified accountant, solicitor, or tax specialist before making any decisions regarding their tax affairs. Use of this tool does not create any professional-client relationship. No determination of tax status is made or implied.

Last updated: July 2026 · Tax year: 2026/27
This profiler applies fixed arithmetic and weightings to the answers you give — it makes no prediction about HMRC's behaviour. Verify any figure with HMRC guidance on compliance checks or a qualified accountant.