IS IR35 A RISK FOR YOU?
Are you a contractor? Do you operate through a limited company? Many of those in business are set up as a company for tax efficiency. Or, it may be that you are a contractor with no option but to operate through a limited company as this is what your ‘employer’ dictates. If this is the case, IR35 may be a risk for you.
IR35 refers to the UK anti-avoidance tax legislation designed to tax "disguised employment" at a rate similar to employment. In this context, "disguised employees" means workers who receive payments from a client via an intermediary, for example, their own limited company, and whose relationship with their client is such that had they been paid directly they would be employees of the client.
Christa Ackroyd, the BBC presenter has recently lost to HMRC on IR35. HMRC argued that hypothetically Ms Ackroyd was engaged under a contract of service rather than a contract for services and therefore she should be treated as an employee of the BBC. The IR35 rules were thus in point, and her company was required to pay the appropriate amount of tax and NICs based on her deemed employment. Could this apply to you? All contractors should now be reviewing their contracts.
We at Grant Considine, Chartered Accountants can arrange this for you. Your contract can be reviewed to assess your risk and we can calculate your potential exposure to additional taxes.
Call us today on 01330 823333 or email firstname.lastname@example.org to see what we can do for you.