What happens if HMRC decides I've been wrongly classified as outside IR35?

If HMRC successfully challenges a status determination and decides an engagement should have been inside IR35, the party responsible for the determination can become liable for the unpaid tax and National Insurance, plus interest and potentially penalties, backdated over the period in question. Since April 2021, this liability generally sits with the client or fee-payer who made the determination, though your own company can still face consequences in some circumstances, particularly for older, pre-2021 contracts where the contractor's company was responsible. Given the amounts and complexity involved, this is an area where you should get professional advice as soon as a dispute arises rather than trying to handle it alone.