IR35 is a complex piece of legislation that can have massive tax consequences for contractors if it's not applied correctly. Here at younique accountancy we have been advising on IR35 for years so you can trust our expertise on it.
What is IR35?
IR35 is the common name for a piece of Intermediaries Legislation applicable when working through an intermediary, such as a personal service Company, i.e. when you provide work to a third party through a company in which you provide your personal services. It was introduced to try and stop people avoiding tax and NI by carrying out work through a company that would otherwise be taxed through the PAYE system.
If you are outside IR35 it means that you are deemed to be doing business in your own right, your company is not just there to disguise your employment and avoid tax. If your contract is inside IR35 then this is similar to if you were employed by your end client.
How does it affect me?
If you are a personal service company then IR35 can have a significant impact on what taxes you pay. If you are outside IR35 and in business in your own right then you get the rewards of this, you can set your own salary and benefit from the tax and NI advantages of taking dividends. If you are inside IR35 then your income from that contract will be similar to as if you were an employee, it will all be subject to PAYE tax and NI.
So is it better to be inside or outside IR35?
It's definitely better to be outside IR35, there can be enormous tax savings compared to being inside IR35! There can also be significant repercussions if you class yourself as outside IR35 but HMRC deem you to be inside, they could get all the tax and NI you'd saved back and then there's interest and penalties to consider too. Therefore it's always essential to get good advice on IR35, that's where younique accountancy come in.
How do I know if I'm inside or outside Ir35?
Your IR35 status is determined by your contract with your agency/end client and your working practices with them. Your contract should always be reviewed by an IR35 expert before signing it though, HMRC don't accept ignorance as an excuse when it comes to IR35. The good news though is that as a client of younique accountancy you can enjoy FREE IR35 contract reviews and advice.
How younique accountancy can assist with your IR35 needs.
Whenever you get a new contract just send it across to us and one of our experts will read through it all and give you their opinion if it is inside or outside IR35. We'll suggest improvements that can be made to it to strengthen it and fully advise you of the most tax efficient way to proceed if you are inside or outside IR35. We have various levels of review ranging from a brief opinion on your IR35 status to a full written contract review for use by third parties for assurance of your IR35 status. We offer free reviews to clients of younique accountancy that have our monthly accounts services.
For more information on all of our services, please check out our services and pricing page.
I want IR35 advice or my contract reviewed
Good idea. Contact us and we'll sort this out for you or call one of our experts on 0808 2626 888 and we'll be happy to help.