is my accountant correct about sub contracting work not being claimable? is my accountant correct about sub contracting work not being claimable?
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  1. #1

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    Default is my accountant correct about sub contracting work not being claimable?

    I have an ir35 contract which id like to sub contract some smaller pieces of work out when it gets busy.

    I asked my accountant if this was a claimable expense and they said if I was to pay someone to do some of my work, then it would be a non qualifying expense and would come out of the 5% allowance. They also said that this could end up meaning that I was in a loss position.

    Is this correct?

  2. #2

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    Quote Originally Posted by someguy1 View Post
    I have an ir35 contract which id like to sub contract some smaller pieces of work out when it gets busy.

    I asked my accountant if this was a claimable expense and they said if I was to pay someone to do some of my work, then it would be a non qualifying expense and would come out of the 5% allowance. They also said that this could end up meaning that I was in a loss position.

    Is this correct?
    If you can sub any of it out, it's not an 'IR35 contract' as you put it
    On Desolation Boulevard, they'd light the faded lights.....

  3. #3

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    Quote Originally Posted by TestMangler View Post
    If you can sub any of it out, it's not an 'IR35 contract' as you put it
    I wish it wasn't, but I'm 99% convinved thats its covered by IR35, they just fairly liberal with a small portion being outsourced

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    Quote Originally Posted by someguy1 View Post
    I wish it wasn't, but I'm 99% convinved thats its covered by IR35, they just fairly liberal with a small portion being outsourced
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  5. #5

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    I fail to see how this is not a legitmate business expense?? it should be fully claimable, you are basically acting as a recruitment agency

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    Quote Originally Posted by TestMangler View Post
    If you can sub any of it out, it's not an 'IR35 contract' as you put it
    What he said. If you are allowed to sub contract work then you have a silver bullet to the IR35 status - it's outside.

    Tell your accountant that you made a mistake on the IR35 status and that you are outside. Sorted.

  7. #7

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    If you are contracting out some of the work you clearly are not caught by IR35 - you ahve had your contract reviewed haven't you?

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    Quote Originally Posted by Waldorf View Post
    If you are contracting out some of the work you clearly are not caught by IR35 - you ahve had your contract reviewed haven't you?
    To be fair it might be the most tulip of contracts. It may not even mention sub-contract or substitution. IMO that is the starting point and if the contract is that bad, why not get some proper advice e.g. one of the professional reviewers - you can see who they are from the links here or on the PCG site or even Google it.

    I would get the contract properly reviewed and if there is scope, get it re-negotiated so that it's outside IR35 then the OP can do exactly what they wish regarding this element of the work. Otherwise, if they don't want to do that or there is not scope AND it's such a small element, why even worry about it?

  9. #9

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    Just to help the OP, what everyone is saying here (which I agree with) is that if you bring in a sub contractor, you've clearly demonstrated that there is no requirement for YOUR personal service and therefore, you cannot be deemed to be an employee i.e. you are outside of IR35.

    It's been discussed regularly on CUK, that it's not necessarily the written contract that can be relied upon to determine your IR35 status. Instead, you would have to review your actual working relationship with the end client.

    Good news here, is that you would clearly be outside of IR35 if you ended up bringing in a subbie. In addition, the sub contractors cost is definitely an allowable expense in the company. It should be classed as a direct cost.

    Hope this helps

  10. #10

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    If, as a permie employee, I pay someone to write a small program which I'll use at work, that wouldn't be deductable - it's be paying someone out of your wages. I assume that's the approach the OP's accountant has taken - and it could be right, without knowing the details of the situation.
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