IR35 What it all means

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IR35

• What you need to know about ir35

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• What is IR35

• a brief introduction

• Tax Legislation

Introduced to counter tax avoidance by
individuals supplying their services to client
via an intermendiary.
Disguised Employees
Are what HMRC are looking for. Disguised
employees are contractors that get all the
benefits of being employed but the tax benefits
of using a limited company.
Here to stay
IR35 is here to stay. Its too important for HMRC
to keep it in place as its so easy for
contractor to work around the rules if it not in
place. One idea is to combine PAYE and National
Insurance. Thats not going to happen any time
soon.
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• Financial impact of IR35

• Let the chart do the talking

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• Business Entity tests

• The test that makes IR35 simple!

Control
Substition
Mutuality of obligation
Contractors are brought in by companies to use
their specialist knowledge that they dont
process inhouse, so its important make sure you
have control over the work you perform.
Substitution in a contract allows you to send a
replacement to perform the contracted work. This
is one of the key areas that place contractors
outside of IR35.
Mutuality of Obligation (MOO) means a contractor
is not expected to accept another contract from
the client and the client is not expected to
offer one.
Financial risk
Part Parcel
Equipment
Contractor should be exposed to an element of
financial risk to be outside of IR35. Risks can
be shown in a number of ways invoicing for the
work or working on a fixed price per project.
Often it's easy to mistake a contractor from a
permanent employee but its important for
contractors to visible as temporary staff and not
considered one of the team
This is a very difficult test of IR35 as most
clients will want/need you to work on their
computers and networks. Unfortunately equipment
can be related to a number of different section
within the Business Entity Test
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