Hi
This is my first post and I'm really confused about our status with regards to IR35.
We are a small consultancy who has 2 directors, who are normally client facing. We also have full time employees, some of whom are client facing and others that are internal working on software development. We pay holiday, sick pay, salaries, employer's NI and employer's pension for our staff. We also fund R&D and training, have our own website and company stationery. Some of the revenue earned from consulting/contracting is held within the company to fund periods where someone is "on the bench". We are NOT a PSC.
We rely on the revenue from all of client facing staff (directors and employees) to keep the company profitable and to allow us to continue to fund our R&D projects. We are not a PSC but if we engage with a piece of work that is within IR35, we will be treated as one and our company will be put at risk because the revenue earned by payment of our invoices would be treated as "deemed" income of the particular consultant, which is definitely not the case. All of us, directors and employees are salaried and we all pay the required tax and NI. If tax and NI is deducted by our clients, this is really paying company funds to HMRC under the guise of "personal income". If this is the case, we will have to lay off our R&D employees as there wont be any revenue to fund them.
Am I correct in my assumptions and does IR35 really apply to a company like ours?
Regards
Monkeyhanger
This is my first post and I'm really confused about our status with regards to IR35.
We are a small consultancy who has 2 directors, who are normally client facing. We also have full time employees, some of whom are client facing and others that are internal working on software development. We pay holiday, sick pay, salaries, employer's NI and employer's pension for our staff. We also fund R&D and training, have our own website and company stationery. Some of the revenue earned from consulting/contracting is held within the company to fund periods where someone is "on the bench". We are NOT a PSC.
We rely on the revenue from all of client facing staff (directors and employees) to keep the company profitable and to allow us to continue to fund our R&D projects. We are not a PSC but if we engage with a piece of work that is within IR35, we will be treated as one and our company will be put at risk because the revenue earned by payment of our invoices would be treated as "deemed" income of the particular consultant, which is definitely not the case. All of us, directors and employees are salaried and we all pay the required tax and NI. If tax and NI is deducted by our clients, this is really paying company funds to HMRC under the guise of "personal income". If this is the case, we will have to lay off our R&D employees as there wont be any revenue to fund them.
Am I correct in my assumptions and does IR35 really apply to a company like ours?
Regards
Monkeyhanger
Comment