IR35 decision making

IR35 decision making

Here are some key questions that you may want to answer before deciding how to approach IR35 and contractor use:

  • When do the IR35 rules apply in principle?
  • As a hirer or supply agency, what are the key rules to follow?
  • What steps must be taken to ensure you are not automatically liable for the tax?
  • Can the rules be avoided, in other words, the risk of having to pay the IR35 taxes excluded? If so, how?
  • If the contractor offers a ‘substitute’ can that work to avoid IR35 applying?
  • If the rules apply, in other words, a particular individual wants to provide services through a company or partnership;
    • how is the decision on employment status  made ( – this is controversial given the plethora of case law surrounding employment status)?
    • to what extent do certain types of contracts between the parties affect the status decision (helping the necessary decision making process)?
  • What can you do to ensure chain compliance, where the engagement is not direct and another supplier fails to properly account for IR35 taxes that may be due, leaving you exposed to risk?
  • Is IR35 insurance a solution?
  • Can a contract review be relied upon?
  • Is there a safe online solution that can answer your status questions?
  • What risks does a lengthy chain supply pose?
  • Can use of an umbrella company solve the problem?
  • Can a job be decided as outside IR35 before a contractor is found to undertake it?
  • How long can you be liable for if you get it wrong?

The IR35 decision making process has no easy solution – except not to use contractors. For detailed and independent IR35 legal advice on any of these key questions or any other IR35 aspect above, call us on 01273 236236.

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