Worried about IR35?

The legislation is not black and white and knowing exactly where you stand is not clear, even to many tax experts! If you are making any of the following assumptions you are putting yourself at risk.

• I’m putting money away just in case
  You have to declare your IR35 status at year end on your P35. If you commit to a ‘No it doesn’t apply to me’ without verifying your status you are at risk. If IR35 is deemed to apply to your contract, you will have to pay the tax owed, up to a 100% fine of the tax owed and interest. In any case when you ‘put money away’ it is the company’s, unless it has already been paid out as PAYE, a dividend or expenses. If you keep money within the company then you will probably pay Corporation Tax on it at year end. Any tax you pay is not refundable if IR35 is deemed to apply, so you could pay tax on the money twice! In which case you might land in more trouble than you think. Messy isn’t it?
• I have a good contract.
  Does it reflect the way you actually work in practice? Are you certain you are operating like a self employed person? Has your contract been independently reviewed? If you are on a standard agency contract it is very doubtful. HMRC will look at all the factors of your engagement with your client when assessing your IR35 status.
• I’m working with several clients.
  Do you work for them in parallel on a day to day basis like a self employed person typically would? Simply having more than one client is unlikely to provide cast iron protection.
• I’m using an offshore company with offshore accounts.
  If you are resident in the UK, work in the UK and pay yourself through an offshore structure, HMRC would probably want to take a close look at your tax affairs. Take some independent advice.
• It doesn’t apply to me.
  Have you completed your recent P35’s assuming that you are outside of IR35? Are you really sure of your status? If you have not been challenged it does not mean that you are safe. Review all aspects of your circumstances carefully and with indepedent advisers.

A lawyer or accountant will not write a guarantee demonstrating that you are outside of IR35. They are professionals and they know that case law prevails.

Work2live provides a genuine and flexible contractor management solution that puts you outside of IR35 and gives you clear employment status. Our services go way beyond a simple payroll or IR35 solution.