Welcome to our IR35
demystifier!
Navigating the complexities of IR35 is crucial for
contractors seeking clarity on their tax status. IR35,
or “off-payroll working rules”, is a UK tax legislation
distinguishing genuine self-employed contractors from
“disguised employees”. It impacts tax and National
Insurance contributions, ensuring fairness in taxation.
Now, let’s delve into some FAQs:
What is the IR35 legislation?
IR35 assesses whether a
contractor should be considered
an employee for tax purposes,
aiming to curb tax avoidance and
promote fair taxation.
Why was IR35 introduced?
It was introduced to prevent
tax avoidance, IR35 ensures
individuals using intermediaries
like limited companies pay taxes
commensurate with their working
arrangements.
How is it determined?
IR35 status hinges on factors
like control, substitution, and
mutuality of obligation in the
contractor-client relationship.
“Outside IR35”
Contractors outside IR35 enjoy
self-employment benefits—
greater control, the ability to send
substitutes, and flexibility.
“Inside IR35”
Contractors inside IR35 are
taxed like employees due to a
working arrangement resembling
traditional employment.
IR35 Enquiries
HMRC may investigate a
contractor’s tax status through
IR35 enquiries. Maintain accurate
records and align working
arrangements to avoid potential
penalties. We’re here to guide you
through the IR35 maze, ensuring
you make informed decisions.