Home | Gossip And Opinion
IR35, more properly known as the Intermediaries Legislation, was introduced in early 2000. It was designed to prevent the avoidance of tax and national insurance contributions (NIC) via the use of intermediary companies, by taxing such companies at a rate similar to the tax paid by employed workers. Obviously, people have not liked this, especially freelancers who frequently take considerable risks in their business. Almost all freelancers are self employed, and so can easily be caught out by this new tax. A contract that is well phrased and clear will be fine, but the smallest mistake in word choice can be enough to sink you. The easiest way to solve this problem, is just to have your contract checked over by an expert. A qualified IR35 reviewer will look over it for about 120. This is really a very small amount, considering the thousands of pounds that you stand to lose if you get it wrong. It's plain, good economic sense to get your contract reviewed. Here are some of the things that IR35 experts check when they review contracts for IR35 status: 1. Will your company be financially responsible for failure? [Yes = Good] 2. Will your sound management be profitable for your company, in performing the contract? [Yes = Good] 3. Does your company have the right to send alternative personnel? [Yes = Good] 4. Is your company responsible for any bad debts? [Yes = Good] 5. Is your contract a "Contract for services" rather then a "Service contract"? [Yes = Good] 6. Are you entitled to sick or holiday pay? [No = Good] 7. Are you an d your client related as if you were "master and servant"? [no = Good] 8. Do you and your client have mutuality of obligations? [No = Good] For a UK freelancer, if all of the above seems to be in order, then you have a good chance of being unaffected by an IR35 investigation. However, you need to consider not only what is written in your contract, but also how it is written. Even if all of the contents of your contract are in order, a badly phrased paragraph could still easily sink you. Thus, the first thing that you need to do is to have your contract reviewed by a professional IR35 contract reviewer. An expert should be able to give you some good advice about any parts of the contract that need to be changed. If you do need to change something, then make sure you get it changed before you sign!
Article Source: http://www.top5tv.com
This page was brought to you by Home Loans Direct and Small Business & IR35 Contractor Accountants Antony J. Holdsworth & Co.
Please Rate this Article
5 out of 54 out of 53 out of 52 out of 51 out of 5
Not yet Rated
