IR35 is tax legislation that is aimed at identifying people who are termed ‘Disguised Employees’ by HMRC and avoid paying tax by trading through their own company. By offering services through a company you can benefit from certain tax breaks. The IR35 legislation is there to make sure you’re a genuine company rather than an employee disguised as a company just to be able to take advantage of these tax breaks.
If HMRC considers you a disguised employee and come under IR35 regulations, they will not recognize that you – as a contractor – are self-employed from a taxation perspective. You will then be subject to the same rate of tax as an employee
Getting it wrong could cost you
If HMRC decides to investigate your affairs, it could have major financial implications, especially if you have been contracting for several months or years. Should they take you to tribunal the consequences, if the court agree you are a ‘Disguised Employee,’ would mean that you are liable for all the tax and National Insurance you haven’t paid, but would have paid as an employee and employer – amounting to an additional tax bill of around 25% of your earnings.
That’s why we strive to ensure everything is done to show you fall outside of IR35, right from the start of your contracting career.
We offer you a FREE Contract Review undertaken by one of our independent tax experts. This is the ideal way of demonstrating to HMRC that you’ve sought the relevant professional advice.
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For a free, Confidential and no obligation discussion about how we might do that, Please call us on 020 7993 8850