Can I bend the rules of IR35?
With the subject of IR35 feeling like a grey area for most contractors, it is recommended that any contractors unsure of their IR35 status seek expert advice from either an accountant or most of the time recruiters will also be able to advise you on this topic, however it depends how uncertain you feel about your IR35 status.
To avoid your contract and working practices falling inside IR35 legislation, you will need to clearly show that the way you are working is that of a self employed contractor. HM Revenue and Customs clearly define what in their eyes classes as ‘passing IR35’; visit their website for more information, but as ever it is worth speaking to a specialist contractor accountant who will be able to simplify things for you and discuss this topic further.
Some contractor accountants also offer free verbal IR35 contract reviews which is quite handy. You can also ask for a full written formal review with a report outlining areas of weakness; however nobody can guarantee or insure you against IR35. You can buy IR35 insurance which will cover the accountancy and legal costs to defend your case but nobody guarantee you’ll be inside as it’s based on what HMRC decide.
You can fall inside IR35 legislations and still work as a contractor through your own Limited company there are still tax gains to be had working this way, and you will only pay tax on roughly 95% if your tax able income rather than the full 100%. Again talking to a specialist accountant means they will be able to advise you on your current contracting situation and advise you on the best way to contract which will maximise your take home pay.
IR35 is in essence quite simple but just having a cleverly written contract isn’t enough, you need to also make sure your working practices reflect your contract.
