IR35 regulations are one of the key pieces of legislation that contractors and freelancers need to be aware of. The regulations are quite complex, but it is vital that you get the right advice, because falling on the wrong side of IR35 could mean that you pay a significantly higher rate of tax on the income from your contracts.

 

IR35 regulations are designed to ensure that only people who are genuinely self-employed get the tax benefits that being self-employed brings. If you work for the same client for a long time, become integrated into their company's processes and organisation, undertake tasks as determined by them, and use equipment provided by the client, your contract may be considered to be within the scope of IR35. It is important to note that it is not only the written contract between you and your client which will form the basis of an IR35 decision - the actual way you are working on the contract will also be taken into account.

 

The main issues that will determine whether your contract is caught by IR35 are:

  • How you are paid for the work
  • Whether you take on any risk for the work
  • Whether there is any degree of integration into the client company
  • Who has a Right of Control over the work
  • Whether there is a Right of Substitution for the work
  • Whether there is a Mutuality of Obligation
  • Whether you use the client’s equipment, or provide your own

 

If your contract were inspected for IR35 compliance, the inspector would consider all of these aspects together when coming to a view. If your contract is caught by IR35, you would need to take most of the income from the contract as salary – negating the tax benefits of becoming self-employed.

Accounts Direct offers a straightforward, great value service that will let you take home as much of your contracting income as possible. We’ll advise on whether your contract might be caught by IR35 regulations, and whether there are steps you could take to make sure that the contract is not caught by the regulations.

For a detailed analysis of whether your contract is caught by IR35, it is important to speak to someone who understands the regulations in detail. For a quick assessment, you can use our handy IR35 calculator. The calculator has been developed by QDOS, in conjunction with ContractorCalculator.

 

 

More information about IR35 regulations is available in our free downloadable IR35 Guide.

Next Step:

Please contact us if you need further advice, have any questions about our services, would like a free consultation.

Speak to us today. Call: 0333 5775 332 or Email: info@account-direct.com

Limited company
sole trader
start ups and small businesses
Contractors
Free guides
Calculators