Tax  

Do you sit outside IR35?

  • List the ways in which IR35 is affecting those who are contractors
  • Describe what contractors can do to prepare for IR35
  • Describe the ways in which contractor can sit outside IR35
CPD
Approx.30min

So with IR35 reform on the horizon - and with it the reality of not deciding your own tax status - here is how you could take the initiative with regards to IR35 reform.

Collaborate with your clients

The better understanding a client has of your IR35 status and the reasons why the service you provide is not ‘disguised employment’, the better the chance you have of being assessed fairly.

If your client has not been in touch to discuss the incoming changes with you, do not hesitate to contact them yourself with a view to getting a firm idea of how they plan to administer the rules next year.

Having worked at the forefront of the IR35 legislation since it was introduced nearly two decades ago, we speak from experience when we say that an open dialogue and joined-up thinking is key in ensuring IR35 status is administered accurately.

When advising businesses ourselves, we stress the importance of involving all parties in the supply chain in the IR35-decision making process. Contractors, as the key component in IR35, must be able to have their say too.

Speak with other contractors

When reform landed in the public sector two years ago, in addition to looking to protect the liability they now carry, clients made incorrect IR35 decisions because they did not fully understand the rules.

They were also perhaps naive in assuming that contractors would not mind being placed inside IR35 and taxed like an employee but without receiving any employment benefits for paying significantly more in tax.

By talking with other limited company contractors working with the same client and approaching your engager together, there is a reason to believe that these businesses will wake up to the seriousness of IR35 changes.

In our opinion, two heads are certainly better than one when highlighting the importance of having IR35 status reviewed fairly and expertly.

Have your contract reviewed

You need to be confident in your own IR35 status before you discuss it with your client and, should the situation arise, plan to challenge it in the hope of overturning what you see as an incorrect assessment.

Given that, at this moment in time in the private sector, contractors retain the right to set their own IR35 status, many independent professionals decide to obtain IR35 contract reviews to assist them.

By having your contract reviewed by an independent expert who has no financial interest in the outcome of your status, you will be well-placed to approach your client with the information when the changes are enforced next year.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. What will IR35 reform do?

  2. IR35 means the contractor is taxed like an employee bu receives no benefits, true or false?

  3. Which of the following does NOT demonstrate that you are an external contractor

  4. What will a Confirmation of Arrangements (CoA) letter do?

  5. Why is it important that working practices reflect that of a contract for services?

  6. Why does the author not agree with IR35 reform?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • List the ways in which IR35 is affecting those who are contractors
  • Describe what contractors can do to prepare for IR35
  • Describe the ways in which contractor can sit outside IR35

I completed this CPD in

To bank your CPD please complete the form below.

Were the stated learning objectives met?

Why weren't they met?

What did you learn from undertaking this CPD exercise?

Why did you undertake this piece of learning?

Banked!

Congratulations, you have successfully completed and banked this piece of CPD

Already Banked!

You have already banked for this article.

To bank your CPD you must or

Register

One or more questions have been incorrectly answered,
 please review your answers and try again.

Please complete all the above text fields to bank your CPD.

More Your Industry CPDSee my completed CPDSee all CPD