IR35

AFFECTED BY IR35?

Whether you’re ‘inside’ or ‘outside’ IR35, we provide a range of flexible solutions so you can keep working compliantly, but in a way that suits you.

Get in touch with a member of our team on 0207 846 1910 or arrange a call back to receive tailored IR35 advice and a bespoke pay illustration.

If you currently work as a contractor, are considering becoming a contractor or own a business that hires contractors, IR35 is something that you should be familiar with.

Self-employed contractors working through a limited company can benefit from tax advantages, but you must comply with IR35 rules in order to do so lawfully. IR35 is in place to make sure that contractors working in the same way as permanent full-time or part-time employees pay the same tax and national insurance as an employee to crack down on tax avoidance.

What is IR35?

Also known as the ‘Intermediaries Legislation’, HMRC defines IR35 as ‘off-payroll working.’ IR35 is shorthand for the UK tax legislation that is designed to identify contractors and businesses which are avoiding paying the appropriate tax by working as ‘disguised’ employees, or are engaging workers on a self-employed basis to ‘disguise’ their true employment status. IR35 was introduced in April 2000 and takes its name from the original press release published by Inland Revenue (now HMRC) announcing its creation.

Working as a contractor

If you work as a contractor through a limited company you can pay corporation tax at 20 per cent on your profits, claim business costs against your tax bill and avoid making National Insurance Contributions (NIC) by paying yourself through dividends. Working as a contractor is often a more tax efficient set up than working via an umbrella company or as an employee of a company.

What does ‘inside IR35’ mean?

To be operating ‘inside IR35’ means that, under the IR35 legislation, you must pay the same tax as an employee. This could also mean that you are entitled to additional rights as an employee or worker (e.g. minimum wage, maternity pay, protection from discrimination).

What does ‘outside IR35’ mean?

This means you can pay yourself a salary and withdraw further income as dividends (which are not subject to NIC), whilst your limited company pays tax only on its profits at the corporate 20 per cent rate.
Things that indicate you are outside IR35 and are operating like a business include having your own business insurance, marketing yourself via a professional website, owning your own equipment and working for multiple clients.
You can have complete trust that you are secure in anything which relates to IR35, and we are on hand to help with any questions you have.