What is IR35?
IR35 is a piece of government legislation created to help distinguish genuinely independent contractors from those who are essentially disguised employees.
Does IR35 apply if I work through an Umbrella Company?
No. IR35 legislation applies to individuals who provide their services via a limited company.
Can I Avoid IR35?
If you are providing services through a Limited Company, you can’t avoid being affected by IR35 and you will need a status assessment.
Who does IR35 Apply to?
IR35 legislation applies to anyone who supplies their personal services to end hirers via their own limited company, sometimes known as a ‘personal service company’. It does not apply to contractors working via an umbrella company.
What Triggers an IR35 Investigation?
IR35 investigations have historically been triggered directly by HMRC campaigns in specific sectors. There are now more sophisticated (software-based) methods to review the tax records of contractors looking for red flags.
What is an IR35 Status and How is it Assessed?
A contractor’s IR35 status effectively determines their tax position with HMRC. It is assessed by either the end client or the contractor depending on the size of the end client.
Does IR35 apply if my client is overseas?
If you are a limited company contractor and your client is based overseas with no presence in the UK, then the responsibility of IR35 status determination falls on you. If they are based overseas but do have a connection to the UK, then they have to assess your IR35 status.
What are the IR35 Employment Tests?
Substitution, Direction and Control, Right of Substitution, and  Mutuality of Obligation are the principal referenced tests.
Who is responsible for determining a contractor’s IR35 status?
Since IR35 reform, the responsibility for determining IR35 status depends on the specific circumstances of the contract. In general, the end client or fee-payer is responsible for assessing if the IR35 rules apply and determining the worker's employment status. If the end client is a small (with an annual turnover of no more than £10.2 million and a balance sheet total of no more than £5.1 million) or a foreign company with no ties to the UK, the responsibility for determining IR35 status remains with the contractor.
What are the financial implications of being inside IR35?
Being inside IR35 impacts how you are taxed since HMRC will deem that you should follow PAYE rules, not limited company rules. You may, therefore, find your after-tax earnings are different after being deemed inside IR35.
How often should I have an IR35 status assessment?
IR35 status assessments are required every time you engage with a new contract or make a change to your contract. The assessment will either be done by your end client or yourself, depending on several factors.
Do I need to close my limited company down if I am captured by IR35?
No. There are many different options available to contractors captured by IR35 for their current contract. Depending on your circumstances, closing your limited company down may be a preferable option, but it is not essential.
What are my contracting options if I’m captured by IR35?
No. If you are captured by IR35, there are a number of options available to you, including working through your company, using an umbrella company or going on the payroll of the agency or the end hirer. You need to consider which of the options available best suits your circumstances.

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