IR35 – four characters that strike fear into the heart of many a freelancer! If you haven’t heard of it, it’s another name for HMRC’s off-payroll working rules. It’s legislation designed to determine whether a self-employed individual (or contractor) is a ‘disguised’ employee, carrying out the same role as an employee of a company but through an intermediary (like a limited company) for tax avoidance purposes, whether that’s on the part of the contractor, or the firm hiring them.
According to the government website (a key source of information about IR35 legislation):
“The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same Income Tax and National Insurance contributions as employees.”
There are a number of factors that can determine your IR35 status, but a couple of key points are:
1.) Your ability to send a substitute: are you able to send a replacement (a co-worker or associate, for example) to work on your behalf, or do you have to carry out the work yourself? This can have an impact on your IR35 status.
2.) Control and supervision: How much control does the client have on the day to day work you carry out (i.e. what you do, when you do it, how you do it and where the work is completed)? This also can have an impact on your IR35 status.
There are many more factors involved in determining whether you fall under IR35, so it’s important to seek advice from an expert if you are unsure. You can also use gov.uk’s ‘Employment Status for Tax’ checker - to help you decide if the off-payroll working rules apply to you and your current contract(s).
Another useful resource that I can highly recommend is the KoffeeKlatch website – they have an interesting blog on the topic which is a useful place to start: https://www.koffeeklatch.co.uk/ir35-10-things/. They also offer a low cost IR35 mini programme to help small business owners determine whether or not they are affected by the rules – if you’d like to find out more, you can find the course here.
https://www.gov.uk/guidance/understanding-off-payroll-working-ir35
According to the government website (a key source of information about IR35 legislation):
“The rules make sure that workers, who would have been an employee if they were providing their services directly to the client, pay broadly the same Income Tax and National Insurance contributions as employees.”
There are a number of factors that can determine your IR35 status, but a couple of key points are:
1.) Your ability to send a substitute: are you able to send a replacement (a co-worker or associate, for example) to work on your behalf, or do you have to carry out the work yourself? This can have an impact on your IR35 status.
2.) Control and supervision: How much control does the client have on the day to day work you carry out (i.e. what you do, when you do it, how you do it and where the work is completed)? This also can have an impact on your IR35 status.
There are many more factors involved in determining whether you fall under IR35, so it’s important to seek advice from an expert if you are unsure. You can also use gov.uk’s ‘Employment Status for Tax’ checker - to help you decide if the off-payroll working rules apply to you and your current contract(s).
Another useful resource that I can highly recommend is the KoffeeKlatch website – they have an interesting blog on the topic which is a useful place to start: https://www.koffeeklatch.co.uk/ir35-10-things/. They also offer a low cost IR35 mini programme to help small business owners determine whether or not they are affected by the rules – if you’d like to find out more, you can find the course here.
https://www.gov.uk/guidance/understanding-off-payroll-working-ir35
RSS Feed
