IR35
IR35 is tax legislation designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a Limited Company.
Overview
Essentially IR35 is tax legislation designed to combat tax avoidance by workers supplying their services to clients via an intermediary, such as a Limited Company, but who would be an employee for tax purposes if the intermediary was not used. Such workers are called 'disguised employees' by Her Majesty's Revenue and Customs (HMRC). In other words, the contractors’ working practices must demonstrate that the person is in business on his/her own account in order to escape IR35 by determining if an employee is inside or outside IR35.
How do I know if I am inside or outside IR35?
For both public sector contractors and private sector contractors providing services to medium-large organisations, your end client is responsible for determining your status. They are likely to be using HMRC's CEST tool, or independent services such as Qdos' Status Review.
Your IR35 status dictates whether you’re treated as an employee or contractor for tax purposes. Let’s compare inside versus outside IR35:
Inside IR35 meaning
Your contract falls within the legislation. HMRC considers you an employee for tax purposes, so you’ll need to make the same Income Tax and National Insurance contributions an employee would through PAYE.
Outside IR35 meaning
You can continue to pay tax and claim expenses as a self-employed person. For freelancers or contractors working out of their own limited company, that means filing company accounts and paying taxes via Self-Assessment.
IR35 defender provided by Kingsbridge
Kingsbridge insurance primarily protects limited company contractors from the potentially crippling costs that can follow an IR35 enquiry. They can include defence costs, taxes and interest — on top of any penalties payable to HMRC.
Read moreApproved Umbrellas
A compliant Umbrella Company is a great way for a worker to provide services to multiple end customers or agencies, build up employment history, obtain all statutory employment rights as well as additional benefits. Speak to one of our consultants to find out more.
Find out more about our FCSA approved companies
At Xpertise we take compliance seriously. We only operate with FCSA accredited umbrellas. All the Umbrella companies we work with are assessed and accredited before we partner with them. Umbrella companies offer a variety of benefits, and you should check directly with them for their current offering and pricing.
Looking for career advice & resources?
Get the latest tools from our team of experts to boost your recruitment journey.
Read moreYour career journey is personal, and we’re committed to understanding your goals, skills, and aspirations. With our personalised approach, we’ll find opportunities that not only fit your expertise but also align with your ambitions, whether you’re looking for new challenges, career growth, or the chance to innovate.
Read moreWe know our markets
We are up to date with emerging technologies and market trends; we lead the way in sharing this knowledge with candidates and clients.
Interview advice
An interview is the most common way for employers to recruit and some jobs applicants can expect to sit through 3 and even 4 interviews as part of the recruitment process.