IR35

IR35 Compliance - What is IR35?
Essentially, IR35 will affect all contractors who do not meet the Inland Revenue's definition of 'self employment'.

Factors Determining Employment Status

How will I know if I am caught by IR35?
Explanation of IR35 legislation, introduced in April 2000, which affects anyone who is working via an intermediary.

Previous status ruling
An area often overlooked is that the Inland Revenue may have already made a Status ruling at a previous visit.

Contract
As most people are now aware a Contract can be written, oral or implied. The Contract is rightly considered to be very important as it sets out the rights and obligations agreed between the Contractor and the Client.

Proper checks
There are many checks to be made to arrive at the correct status of an individual. It is not sufficient to pick one topic like substitution or control and base all your arguments on this one point.

Mutuality of obligation
Mutuality of Obligation is now a common phrase when dealing with Status disputes.

Control
This is one of the main pointers used in disputes regarding employment and self-employment.

Substitution and exclusivity This is probably the main point now discussed amongst Contractors, as many incorrectly believe it is the only point needed in a Contract to prove self-employment.

Financial risk and payment
Financial risk and payment are one of the main differences between employment and self-employment.

Equipment
This is considered in many cases and can sometimes surprise you with the results.

Part and parcel of the organisation
Part and Parcel of the Organisation considers whether the Contractor has now become integrated into the Client Company.

Intention of the parties
It is often stated that the intentions of the parties is important and there are a couple of questions on the Inland Revenue questionnaire relating to this point

Further Reading

Does working at the clients site affect IR35? Article on the Revenue's thinking towards contractors working on site and during fixed hours. Do these factors determine whether you are inside IR35?

Do composite companies help beat IR35? Since IR35 was announced various inventive means and schemes have been put forward to circumvent the legislation. But do they really work?

Does the right of substitution beat IR35? The Revenue's thinking toward substitution clauses in agency contracts, and whether they do indeed defeat IR35.

Why do agencies insist on control clauses in contracts? With the introduction of IR35, it is important that one man company contractors ensure that their contracts accurately reflect the way they work.

IR35:The obligation of personal service. What it is and why it matters This article is about one particular essential feature of employment contracts known the Obligation of Personal Service.

IR35:Substitution, control and mutuality of obligation A key article, provided by Accountax, addressing some of the key considerations in determining whether or not a contract for services will be subject to the IR35 rules.

Project based work and operating outside IR35 When attempting to draft a contract that falls outside the scope of IR35 it is very important to look at the nature of the work and to structure the work in the form of a project. Lawspeed like many other advisors place significant importance on the work and therefore the contract being project-based if an engagement is to fall outside the scope of IR35.