Employment Status/Contractors and IR35
IR35 was introduced to prevent people (often IT contractors, but the principles apply everywhere) who are self employed (in name only, but in reality employed) benefiting from self-employed tax status. Whether someone is or is not self employed is often not clear cut, but the following are seen as indicators:
- Control over work carried out
- The right to get a substitute or helper to do the job
- Provision of own equipment
- Is a financial risk taken (e.g. fixed payment for completing a particular job or project)
- Permanent desk or office (or similar)
- Employee benefits
- Length of engagement
These are often matters of general employment law, and not specific tax legislation. There is an enormous amount of Case Law in this area and the Taxman is not always right. They do not have the final say on whether somebody is caught by IR35 or not. We can argue your case for you.
The cost of employees and employers national insurance if you get it wrong are considerable as well as interest and penalties.
We can review your existing arrangements and give you our opinion on whether it will stand up to attack from the Revenue. We can help draft contracts for services to assist you and advise on how you can maximise your chances.