IR35 is a tax legislation designed to combat tax avoidance by workers supplying all their working hours and services to one specific client or customer throughout the year and so could otherwise be deemed as an employee. HMRC are now doing regular checks to establish businesses that fall into this category.
HOW TO MAKE SURE IR5 WON’T APPLY TO YOU
First of all, always ensure your tax returns are submitted on time and its advisable to have an accountant especially as they can monitor your position and advise you accordingly
if you are worried that your business may be compromised by IR35.
Don’t take a contract that is in direct replacement of an employee, you should always start a contract on the understanding that the role is for a contractor. Always ensure
You are not specifically named in the contract, you should operate under a ‘contract of services’ arrangement as a business to the business service provider.
Keep records, such as telephone logs and emails between you and the contractor so that you can support your day to day to a working arrangement.
Don’t become part of the contractors ‘furniture’ – you should not be on any of their organisation charts, or have any of your own business cards in the name of the contractor and
you cannot get any benefits that are normally given to the contractor’s staff.
There are several other areas that can also support a claim for IR35 exemption but they are best discussed with professional guidance as they can become more detailed.