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IR35 – What Is It And How Does It Affect You?

Whatever your involvement in contracting, seasoned pro or just starting out, you will probably have heard quite a lot about IR35. Even some long-time contractors though have little understanding of what it actually is, how it impacts them and how, with care, they can establish working patterns and contractual relationships that keep them outside of its scope. The lack of understanding in the contracting industry causes confusion, stress and higher than necessary bills for many, with contractors being drawn into expensive umbrellas or accountancy packages on the basis of meaningless claims such as “IR35 Compliant”. This series of guides will take you through what the rules actually say and what that means for you.

HMRC have held a consultation on the IR35 rulings around off-payroll workers within the private sector. Recently rolled out to the public sector last year, the sector faced shambles for workers that lent their services to public sector clients through their personal service companies, with many blanket-ruled inside of...
In the 1990s many contractors used a tax defense method that consisted of setting up a limited company, paying themselves a small salary, then taking the rest of their share of their company’s profits as dividends, along with other shareholders. The contractor still paid taxes on their salary and...
Does IR35 apply to you? This is an important question if you are working as a contractor in the UK. IR35 (otherwise known as intermediaries legislation) was introduced into the UK in April 2000 by the then Chancellor of the Exchequer Gordon Brown and primarily effects contractors who often...
IR35 status is based on several factors, and with care and forethought it is possible to set up your business and your relationship with the client in such a way that any contract is more likely than not to be outside IR35. Some of these have to do with...
IR35 is the shorthand name (taken from the reference of the statutory instrument which introduced it) of the Intermediaries Legislation. Introduced in April 2000, this legislation is intended to separate “disguised employees” from genuine contractors, and to tax the former as though they were employees. IR35 was introduced against a...
The outcome of working a role in scope of IR35 is that any payment for that role received by the intermediary (your company) is classed as a “deemed direct payment”. This means that it is assumed by HMRC to be a salary payment for the individual completing the work...
The outcome of working a role in scope of IR35 is that any payment for that role received by the intermediary (your company) is classed as a “deemed direct payment”. This means that it is assumed by HMRC to be a salary payment for the individual completing the work...
Since April 2017 the responsibility for determining a role’s IR35 status depends on whether the engager is in the public or private sector. Public Sector: For this purpose the definition of public sector is broader than you might expect, it encompasses not only government departments and agencies but also any organisation...