IR35 - expenses and insurance

**northernladuk** · 29 September 2016, 19:56

You've had it checked and you are outside IR35. You've gone to other lengths to make sure you are outside so why are you overly worried what HMRC will do? It's a much better position than 90% of other contractors. Get TLC35 or IPSE+ to just top it off and worry no more.

The thing you should be more worried about is the changes coming to PS contracting come April IMO.

**Lance** · 30 September 2016, 11:56

Originally posted by newbieITContractor2015 View Post

Currently I process my expenses (i.e. travel, subsistence, etc) as if I'm outside of IR35, but I'm not sure if push came to shove the HMRC would agree. If they did disagree, what's the outcome, paying the tax that would have been payable and a fine?

IR35 Tax Calculator

As for fine I'm not sure but they'll probably chase initially for £100 late payment plus interest on the gap.
But your post suggests you'll be OK anyway. Just make sure your working practises are correct, and gather evidence of that as you go.

**GillsMan** · 30 September 2016, 12:12

Is the 95% of turnover coming from the Public Sector significant? I ask because my old accountant used to ask me to notify him if my turnover was more than 50% derived from the public sector. It never was so I didn't question him on it, but that might be a factor? I did a quick Google but couldn't find anything on it.

**northernladuk** · 30 September 2016, 13:41

Originally posted by GillsMan View Post

Is the 95% of turnover coming from the Public Sector significant? I ask because my old accountant used to ask me to notify him if my turnover was more than 50% derived from the public sector. It never was so I didn't question him on it, but that might be a factor? I did a quick Google but couldn't find anything on it.

I can't see why it is. IR35 is per contract so he can still be inside for 95% of his income and outside for 5%. I think it's a red herring. He should be talking about the PS gig and it's IR35 status.

That said it certainly helps having multiple pieces of work as per the old BET's but they are defunct now.

**malvolio** · 30 September 2016, 14:27

Originally posted by northernladuk View Post

I can't see why it is. IR35 is per contract so he can still be inside for 95% of his income and outside for 5%. I think it's a red herring. He should be talking about the PS gig and it's IR35 status.

That said it certainly helps having multiple pieces of work as per the old BET's but they are defunct now.

Two casual on demand contracts aren't much evidence but they will certainly help. From next April though he will be paying PAYE and NICs on 95% of his gross income so IR35 is an irrelevance anyway.

There are many other threats though. IPSE+ membership will be his best investment in the future.

**youngguy** · 30 September 2016, 15:26

Originally posted by malvolio View Post

From next April though he will be paying PAYE and NICs on 95% of his gross income so IR35 is an irrelevance anyway.

For budding Accountants (or indeed real ones), what would that deduction most likely be?

Eg invoice for £10k

**eek** · 30 September 2016, 15:32

Originally posted by malvolio View Post

Two casual on demand contracts aren't much evidence but they will certainly help. From next April though he will be paying PAYE and NICs on 95% of his gross income so IR35 is an irrelevance anyway.

There are many other threats though. IPSE+ membership will be his best investment in the future.

Where are you getting that 95% figure from? There is no mention of expenses in the public sector consultation document as IR35 already means no expenses allowed

**newbieITContractor2015** · 30 September 2016, 15:33

Thanks, my main contract is a public sector contract. I'll keep a close eye on the ir35 for next April.

What do you think of these tips?

I need to sort out some business cards and make sure I have my company name on my ID badge

Not sure my client would go for adding my company email to my account

It does seem that ultimately I'm stuck, umbrella companies don't seem great and a permanent role for isn't available

**northernladuk** · 30 September 2016, 15:48

Originally posted by newbieITContractor2015 View Post

Thanks, my main contract is a public sector contract. I'll keep a close eye on the ir35 for next April.

What do you think of these tips?]

I need to sort out some business cards and make sure I have my company name on my ID badge

Not sure my client would go for adding my company email to my account

It does seem that ultimately I'm stuck, umbrella companies don't seem great and a permanent role for isn't available

If you are in the PS now then keeping an eye on it until April is going to be too late. If it hits you'll be leaving end of March with droves of other contractors that didn't see it coming and act quickly enough. You have some knowledge now so you've got to decide when to act. Eek says now to avoid the droves. I can imagine a host will leave end of Dec when contract ends and an even bigger amount just as it hits. Your choice but just keeping an eye on it could leave you high and dry.

That checklist is OK but many of them you can't do, some more are such minor points it's hardly worth it and so on. It will suit a tick box permatractor that doesn't really understand what they are doing I guess. What is better is to read up what IR35 actually is and start thinking like a business. Most of those will be second nature if you do. You will also know from your reading what the 3 main pillars are and know that getting those right is most of the battle. For example, the business cards is pretty much a waste of time for an IR35 defence. I wouldn't be going out to get business cards based on IR35 alone.

IR35 - expenses and insurance