IR35 advice

[Shakti]

Hello,

I am planning to start contracting on my own and have a few questions about IR35. Need some guidance to point me to the right direction so I can decide if I am inside or outside IR35.

I am planning to go via the limited company route. As a Ltd company, I plan to undertake the following activities :

1. Taking up contract employment with clients. ( May be at the client premises or work from home or a combination of both ). Would it be better if I have 2 different clients at the same time?

2. Sell software. Plan to sell some software I have written through my limited company.

If I do both 1 and 2, do I still run a risk of being identified as a permanent employee under IR35? Also, if I work for 2 clients at a time, can I still be considered as inside IR35?

Thanks in advance for the advice.

[Archangel]

Click on the Ir35 link top right.

go to www.pcg.org.uk and check out their guides.

[Ardesco]

Hello,

I am planning to start contracting on my own and have a few questions about IR35. Need some guidance to point me to the right direction so I can decide if I am inside or outside IR35.

I am planning to go via the limited company route. As a Ltd company, I plan to undertake the following activities :

1. Taking up contract employment with clients. ( May be at the client premises or work from home or a combination of both ). Would it be better if I have 2 different clients at the same time?

2. Sell software. Plan to sell some software I have written through my limited company.

If I do both 1 and 2, do I still run a risk of being identified as a permanent employee under IR35? Also, if I work for 2 clients at a time, can I still be considered as inside IR35?

Thanks in advance for the advice.

Yes, IR35 is assessed on a contract by contract basis. You could have 3 concurrent contracts, and two could be IR35 caught and one could be outside IR35. It all depends on the terms and conditions of each individual contract, and the working environment. An IR35 compliant contract is worthless if you are treated like a permie at the place you work.

[Shakti]

Thanks. This does clarify things. A case is possible where some of my work is outside IR35 and some may be inside IR35. Hence, I may have to pay additional tax for the work which falls inside IR35 only, while benefit from the work which is outside IR35.

Sounds like I need a good accountant and a good person to verify my contracts and working practice to find if it falls inside IR35 or not.

Thanks a lot for the advice. Had read a lot and was getting confused. This clears things up a bit.

[malvolio]

Thanks. This does clarify things. A case is possible where some of my work is outside IR35 and some may be inside IR35. Hence, I may have to pay additional tax for the work which falls inside IR35 only, while benefit from the work which is outside IR35.

Sounds like I need a good accountant and a good person to verify my contracts and working practice to find if it falls inside IR35 or not.

Thanks a lot for the advice. Had read a lot and was getting confused. This clears things up a bit.

Don't forget if you're IR35 caught you have to take 95% of the gross income on that contract as salary. If you really do have a mix of IR35 and non-IR35 contracts, you take salary on the caught ones and pure divis on the non-caught ones.

[poppy01]

Don't forget if you're IR35 caught you have to take 95% of the gross income on that contract as salary. If you really do have a mix of IR35 and non-IR35 contracts, you take salary on the caught ones and pure divis on the non-caught ones.

when explained like this, it really does show up ir35 as a lot of nonsense doesnt it

[TykeMerc]

when explained like this, it really does show up ir35 as a lot of nonsense doesnt it

Indeed.

Since IR35 is aimed at concealed employment it's pretty absurd to be regarded as full time employed and self employed depending which contract you're looking at in the multi contract scenario mentioned on this thread.

Admittedly as a group I doubt anyone on CUK actually regards IR35 as rational or sensible since we know it's just a way to force us to pay more to HMRC.

[Bomber]

An IR35 compliant contract is worthless if you are treated like a permie at the place you work.

I don't get this.

• How can this information be sort?
• If you are providing services and a manager needs a job doing and its inside your service remit you do it, same as a permie.
• If the managing director see's you working in a department, how do they know that your a contractor not an employee?

You mean like paid holiday, company perks?

[KentPhilip]

I don't get this.

• How can this information be sort?
• If you are providing services and a manager needs a job doing and its inside your service remit you do it, same as a permie.
• If the managing director see's you working in a department, how do they know that your a contractor not an employee?

You mean like paid holiday, company perks?

sought

If you're going to use posh words, you need to spwell them rite.

[malvolio]

I don't get this.

• How can this information be sort?
• If you are providing services and a manager needs a job doing and its inside your service remit you do it, same as a permie.
• If the managing director see's you working in a department, how do they know that your a contractor not an employee?

You mean like paid holiday, company perks?

What is the (utterly stupid) primary test of an IR35-caught contract? "Are the arrangements such that if it weren't for the intermediate company(ies) the worker would be an employee of the company" isn't it?

You don't have to be an employee to work in an employee-like manner. Employees have to do what they are told. Contractors only have to do what they are told if it is in the schedule of work in their contract. Employees have to do the work themselves. Contractors don't. Employees get paid even if there's nothing for them to do. Contractors don't.

IR35 in a nutshell: it really is that simple.