Falling Inside IR35 Tax Rules – UK Tax Advice For The Self-Employed – TaxBack

from the blog.

Falling Inside IR35 Tax Rules

Falling Inside IR35 Tax Rules – UK Tax Advice For The Self-Employed

If you fall within IR35 tax guidelines, it means that HMRC sees you as an employee in the ‘off-payroll’ working laws, for tax purposes. Here’s more UK tax advice on IR35.

What Does It Mean To Be ‘Inside IR35’?

In 2000, the off-payroll working rules were introduced by HMRC to make sure contractors, who would otherwise be employees, pay the same tax applicable to actual employees.

Simply put, if you are a contractor falling within IR35 you must pay income tax and National Insurance Contributions like any other employee would.

If your contract falls outside of the IR35 rule, HMRC will classify you as being self-employed and you pay tax accordingly. In order to determine your individual case, let us evaluate your status. It’s a fine line between paying tax and saving with claiming self-employed tax returns; after all its your hard earned money.

Related Post:UK Tax Tips For Saving When Operating As Contractor Through A Limited Company

Who Determines If You Are In Or Out Of IR35?

It depends on your client and their standing in the public or private sector. Let’s see;

  • Contractors in the public sector – then your end client must determine your IR35 status. Which means they work it out using HMRC’s tool to check employment status (CEST) or even an independent tax consultancy agent to work it out.
  • Contractors in the private sector – in this case you determine your IR35 status. However, this rule changes by April 2020. Then larger clients and medium grade companies will hold responsibility for determining your IR35 status.

How Can I Determine If I’m Inside IR35 Status?

You can use HMRC’s ‘Check Employment Status Tool’ to determine if you are in or outside of the IR35 rule. In order to use this tool, you need the following information;

  • Contract details
  • Workers responsibilities
  • Details on who decides on the type of work needed to be done
  • Who decides; how, when and where work is carried out?
  • How will the worker be paid?

Or you could let us help you, determine your standing. Contact us today, our tax consultants are ready to help!

Related Post: What To Consider Before Becoming Self-Employed – And Claim Self-Employed Tax Returns Too!

Related Posts

The Only Things Certain Online Are Cryptocurrency, PayPal, And Taxes

Online payment platform PayPal has launched a cryptocurrency hub that makes it easier than ever to get your hands on some digital coins, but America’s tax laws haven’t caught up yet, so there are some pitfalls to be aware of....

Can an Accountant Save Your Business Money?

Accountants use their skills and expertise to help grow your business by managing your financial accounts. It's common knowledge that a lot of what they do is recording and inspection. However, can they actually save you money? A lot of...

Covid-19: Income Support for Self-Employed Launches

Covid-19 is not only a health crisis for self-employed launches but also a pressing employment crisis. The HMRC has begun to contact over 3 million taxpayers who could be qualifying for the Self-Employment Income Support Scheme (SEISS) of the government...

Translate »