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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.

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...
HMRC online IR35 checker remains inaccurate As most contractors will know, determining one’s IR35 status can be a tricky process.  When the Government recently moved the burden of IR35 assessments to the HR departments of public sector bodies and away from their contractors through the introduction of the Off-Payroll rules,...
Business is largely unprepared for the rollout of IR35 reform into the private sector next April, new research by recruitment trade body, the Association of Professional Staffing Companies (APSCo), has shown. A survey of APSCo members revealed that just under two-fifths (thirty-nine percent) of the professional recruitment...
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...
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...
A Professional body has urged caution over Off Payroll rollout towards the private sector Responding to last week’s Budget announcement, The Chartered Institute of Taxation’s (CIOT) main criticism of Philip Hammond’s Red Book was the number of surprise measures that were included with seemingly little or no consultation, with some...
Off Payroll in the Private Sector – Will It Affect Me? Monday’s Budget confirmed that the new Off Payroll IR35 rules will soon be rolled-out to the private sector – but what exactly are the Off Payroll rules and who will be affected? Background The government introduced IR35 in April 2000 to...
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...
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...
Umbrella company usage is expected to increase dramatically following the implementation of IR35 reforms into the private sector in April 2020, a new survey of recruitment agencies has revealed. Ninety-one percent of the professional recruitment firms polled indicated that they believe that an increasing number of contractors will switch...