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Office Hours: 9am to 5.30pm

IR35 Guide: are you inside or outside?

2015 marks the 15th year that IR35 has been around, however there is still uncertainty about what it is and what it does within the contracting community. The legislation is under review at the moment but it’s still worth looking at what it has meant for contractors and what the likely impact of the current review will be.

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A very brief history of IR35

In March 1999, HMRC issued a press release on how changes were going to be introduced to counter tax avoidance in the provision of personal services. In simple terms, the then Government felt that many contractors were tax avoiders when they provided their services through a limited company, even when carrying out roles similar to permanently employed workers.

The original intention of the changes were to attack permanent employees who go back to the same company as a contractor but it soon became clear that the proposed legislation would affect all contractors.

Over the course of the following 18 months, there were protests from the House of Lords and various groups representing the contracting sector, however despite these protests, the Finance Act 2000 brought the IR35 legislation into law.

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These 3 questions have been simplified and there is of course a huge amount of information available to you. The onus is on the contractor to make sure that they have taken IR35 into account when accepting a contract role and deciding what vehicle to provide their services through.

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How can One Click help?

It is important to take advice and One Click Accountant can put you in touch with the right people to review your contract and give you advice on working practices. Ultimately the choice is yours and if you decide that working via a limited company, either inside or outside of IR35, we can give you the best possible accountancy service.

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Our Calculations

IR35 calculations

Our sources 

 

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