What is IR35? 

 

IR35 is a piece of legislation that affects all contractors who do not meet the HMRC definition of self employment.

 

The contract caught by the IR35 rules will result in an increased tax and N.I. liability and will prevent contractor companies from retaining profits to grow their business in the future.

 

Those contractors who fall under the IR35 rules will be liable to income tax and National Insurance (both employer and employee N.I.), following deductions for allowable expenses under IR35. After certain allowable expenses the most of company income will be taken as salaries which will be subject to Schedule E taxation and National Insurance (N.I.).

 

Under the HMRC investigation, if they successfully argue your contract to be inside of IR35 then HMRC will not only demand the underpaid tax with interest but can also impose significant financial penalties.  Therefore, it’s really important that contractors should have their contracts reviewed by the IR35 experts to ensure they are complaint with IR35 legislation  

IR35 Review

 

IR35 contract review undertaken by us is an excellent evidence of demonstrating the HMRC that the relevant advice has been sought. The full detailed IR35 review report comments on each relevant clause in the contract with detailed explanation as to why the clause is positive or negative in terms of IR35.  We will advise if your contract is in or outside of IR35 legislation.

 

If in our opinion the contract is captured by IR35 legislation, we will suggest the changes that need to be made in order for the contract to be considered as outside of IR35. Even if the contract is initially outside of IR35, we will clearly highlight what you can do to make your contract more IR35 friendly, to hopefully make your contract as robust as possible.  For more information and price please 

© 2012 by A1 AccounTax.  Accountantants in Warrington. Contractor Accountants. 

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