What's in the guide
This guide will explain what IR35 is, outlining the rules and legislation and how it will affect you.
- What is IR35 and why was it introduced?
- How does IR35 affect you?
- Determining your employment status
- Relevance of case law
- Recent IR35 Developments
- Brookson's IR35 review service
- Brookson's Tax Promise
- IR35 Jargon Busters
What Is IR35?
IR35 is the industry name for a specific part of the Finance Act 2000. It aims to prevent people avoiding tax by working as self-employed contractors through an intermediary limited company, while performing the same function as regular employees.
As an example: An IT technician might leave their permanent job on the Friday, only to return on the following Monday as a contractor, performing exactly the same job in the same was as they did before but working via a limited company intermediary.
The legislation says that these kinds of contractors are in fact ‘disguised employees’ and should be subject to the same Income Tax and National Insurance Contributions (NICs) as regular employees.
In other words, the legislation ensures that if the relationship between the worker and the client would have been one of employment if it wasn’t for the intermediary, the worker pays tax and NICs roughly equivalent to an employee.
Since 1995, we’ve provided accountancy, tax and support services to over 70,000 contractors, freelancers and self-employed professionals - it’s what we specialise in and it means we’ve been able to develop a unique service that is innovative, friendly and easy to use.
- Know your tax position when you need to – with daily* updates from Brookson
- Know how much you can safely withdraw from your business, without spending the taxman’s money
- Realise your earning potential – now and for the future, with advice on pensions, investments and wealth planning
- Benefit from FREE and unlimited employment status reviews (IR35)
- Get support every step of the way with our unique Tax Promise
- Specialist Advisors available 6 days a week†
*Excludes weekends and bank/public holidays. † Specialist Advisors available six days a week, Monday to Friday, 8am-6pm and Saturday, 9am-1pm. Excludes bank/public holidays.
"When I started contracting, I was daunted by the amount of administration that I thought I would need to complete had I set-up through a limited company, so I started through an umbrella. However, about 6 months in, I investigated my options and decided that I would operate through a limited company. Using the solution offered through Brookson has been extremely streamlined with almost no administrative overhead.”
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