Contractors and IR35
The Taxman loses most IR35 disputes!
Here at Mabe Allen, we have a team of highly-experienced professionals at the helm of our operations. With a wealth of knowledge and expertise to draw upon, you’ll be able to count on us to explain and guide you through the tax advantages of contracting in meticulous detail, along with all of the possible scenarios that could present themselves to you.
Our specialist accountants are proud to provide our clients throughout Ripley, Ilkeston, Derby and the surrounding areas with a number of different inclusive services for contractors, including the following:
- Company formation
- Annual accounts
- Company tax returns
- Personal tax returns
- Company secretarial service
- VAT returns
- PAYE returns
- Tax computations
- Dealing with IR35 disputes
IR35 refers to two sets of tax legislation. They’re designed to battle tax evasion by workers and/or the organisations who hire them. These workers have been dubbed ‘deemed employees’ by the HMRC. If caught by IR35, then they’ll be made to pay National Insurance and income tax as if they were employed in a full-time, permanent role.
IR35 can be financially damaging to a person or a business as it can reduce net income by as much as 25%, which could equate to thousands of pounds in extra income tax and National Insurance. With this in mind, there are many factors to consider when it comes to determining whether a contractor will be caught by the notorious IR35 legislation and those fundamental factors include:
- The right to get a substitute or helper to do the job
- Mutuality of obligations
- Provision of equipment
- Financial risk
- Basis of payment
- Opportunity to profit from sound management
- Part and parcel of the organisation
- Right of dismissal
- Employee benefits
- Intention of the parties
- Length of engagement
These are often matters of general employment law, and not specific tax legislation. There is an enormous amount of Case Law in this area and the Taxman is not always right. They do not have the final say on whether somebody is caught by IR35 or not. If you experience this as a contractor, then you can rest assured that our expert accountants will be able to argue your case for you.
Not only are there considerable associated costs of employees’ and employers’ National Insurance if you get it wrong, but monetary interest rates can be added on and you could also be handed a hefty fine or penalty.
If you’re concerned about your IR35 situation, then you’ll always be able to look to us to review your existing arrangements and give you our professional opinion on whether it will stand up to attack from the Revenue. In addition to this, we can also help to draft contracts for services in order to assist you and advise you on how you can maximise your chances.
If you’d like more information about how we can help you with your IR35 situation or if you have any questions about how it can affect you as a contractor, then get in touch with a member of our friendly, knowledgeable team today – we’re always on hand to help.