If there’s one thing that you can guarantee will be occupying the minds of many UK contractors at any tax review, it’s the highly controversial legislation that is IR35. Widely misunderstood and increasingly maligned, IR35 serves a valid purpose in the quest to combat ‘disguised’ employees, but that’s not made it any more popular. Every time a review or debate surfaces that’s to do with the contracting world, IR35 won’t be too far away, but the latest event hasn’t brought any good news to those who are seeking to either amend this ruling, or even do away with it entirely.
The Review
To put it simply, this year’s 48-page review doesn’t contain ‘anything significant’ with regards to IR35. One observer commented that the report was tantamount to a ‘PR plan’ for IR35, which, given that the legislation is now a decade-and-a-half old, is a fairly disappointing development. Some have said that there is no way to judge how successful previous adjustments to IR35 have been, as this latest report contains little to no data that deals with such figures. However, others saw positives, and have expressed a belief that ‘slow progress is being made’. Clearly though, nobody is yet wholly content that the controversy over IR35 is coming to a (long-awaited) end.
IR35 Guidance
As mentioned, IR35 is designed to tackle the omnipresent concern that is a ‘disguised employee’. In essence, this is a person who claims to be self-employed, but is actually an employee when you get down to the technical details. Having a legitimate self-employed status means that you will fall outside the IR35 legislation, and thus your income will be partially shielded from PAYE taxation. So far, so good, but problems regularly result when people try to get to grips with employment guidelines that are not always explicitly clear. Because of this, the IR35 ruling has become rather notorious, but, with the right guidance, it doesn’t have to be a source of frustration to you.
Here at ICS, our team of dedicated contractor accountants offer many solutions for freelancers in various industries, and one of these services is professional IR35 guidance. Determining your correct employment status is a vital step to take as a contractor, so you need to do so as quickly as possible if you haven’t already. It’s as easy as contacting our professional team by calling 0800 195 3750 or emailing webenquiry@icsuk.com, so don’t hesitate to get in touch if you need assistance.
