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Chartered Accountants & Chartered Tax Advisers
The “intermediaries’ legislation”, often referred to as IR35, applies to individuals who provide their services through an intermediary (often their own limited company). If they would be an employee of their customer if the contract was directly with them as an individual rather than with their company, then IR35 will apply.
If caught by this legislation, you are required to pay the majority of the income earned on the contract out from your company to yourself as a salary, meaning you are unable to take advantage of various tax saving opportunities available to other business owners.
Unfortunately, the legislation is anything but clear. If there is any possibility that you could be affected by IR35, you need to take care to ensure that your contract is compliant. If HM Revenue and Customs were to enquire into your company’s affairs and determine that your contract is caught, and you have not been operating the legislation correctly, they can go back 6 years in their assessments, which could be very costly.
We therefore strongly recommend that if there is any uncertainty regarding your contract, you get it independently reviewed.
|From Hartley Wintney|