Contractors are professionals that provide their skills or services to a client for a set period of time. There are different ways in which a contractor can structure themselves for tax purposes and there are many considerations, such as the IR35 legislation that needs to be considered.
Sherwin Currid have expert knowledge of IR35 and help many clients who want it explained clearly so they can understand how it affects them.
What is IR35?
IR35, which is also known as the Intermediaries Legislation, was first introduced in April 2000. It was brought in by the Government to address tax avoidance by individuals working in the role of an employee through an intermediary, such as a limited company. Working in this capacity is sometimes referred to as a "disguised employee" arrangement.
If the IR35 legislation does not apply to an engagement, then it is often more rewarding for individuals to operate through a limited company. However, the penalties from not applying the rules correctly can be severe and HMRC will deem you to be an employee for tax purposes.
Whilst the principles of what IR35 set out to achieve are understandable, it would be helpful if there were greater clarity as to how contractors are taxed. Unfortunately, this area has been in the news as it continues to suffer with tax rules and definitions that are not easy to understand and apply. As a consequence, IR35 has created much uncertainty and has caused individuals to be taxed at the wrong rate. This happens because people don’t understand the legislation and don’t want to risk the fines and penalties that HMRC can levy if they get it wrong, not to mention the personal distress it could cause.
Recent changes to the legislation have meant that many engagers now own the risk of applying IR35 incorrectly and are responsible for making the determination. If you feel the determination made by your client is wrong and you should be ‘outside IR35’, then there is a right to appeal and we can help with this.
Sherwin Currid are experts in IR35 and help many clients navigate this complex and changing legislation. We can help you:
Sherwin Currid are experts in IR35 and help many clients navigate this complex and changing legislation. We can help you:
Understand the IR35 Rules
At Sherwin Currid we have in depth knowledge of IR35 and have been advising clients about it and its implications for many years. Our team of experts can help you look at whether key determinants of working status such as Mutuality of Obligation, Control and Substitution point towards you being self-employed or an employee. We can help you understand what your working arrangements say about your IR35 status and ultimately we will give you confidence that you are paying the correct amount of tax.
Advise whether your assignment is inside IR35 or outside IR35
This is a complicated area and includes your contract and working arrangements. Our experts can review contracts from an IR35 status perspective. Often an assessment is made of an individual’s status by only looking at the contract. However this is not the only determinant and what really matters is how the individual works in practice and whether their working practice mirrors that of an employee and so could be deemed disguised employment. We can discuss and review all the elements relevant to your engagement in order to provide you with an expert opinion on your status that you can rely on and be comfortable that you have an accurate IR35 assessment.
Make IR35 Calculations
We can explain, in a way that is easy to understand, the tax implications for you if you operate inside or outside IR35. An inside IR35 calc will enable you to see how much additional tax you would need to pay if an IR35 assessment deemed you to be inside the IR35 legislation.
Stay up to date with IR35 News
Sherwin Currid keep clients up to date with proactive tax advice, including changes to the IR35 rules. Since it was first announced in 1999, the legislation has been reviewed a number of times and the rules on how it operates has changed. Interestingly, the basic legal principals and case law around who is deemed an employee and who is not has not changed.
IR35 explained by Local Accountancy Experts
If you are looking for an accountant near you that has many years of experience in advising and helping contractors and freelancers operate in a tax efficient and fully compliant way then please get in touch, we would be delighted to help.
We offer a range of packages to suit most clients’ needs but are always happy to bespoke a package if needed.
Our head office is in Guildford but we have a number of other offices around the South East where we are always happy to meet prospective clients to understand their situations and to explain how we can help.
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