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TERMS OF YOUR CONTRACT

TERMS OF YOUR CONTRACT

IR35 & PERSONAL SERVICE COMPANIES

Contractors and IR35

YOUR WORKING PRACTICES

YOUR WORKING PRACTICES

IR35

IR35

OUR

PROCESS

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IR35 is legislation to counter what HMRC class as disguised employment. IR35 can apply when you work for a client through a  limited company.

Entity Terms used
Worker (you) Director, freelancer, consultant, contractor
Intermediary Your personal service company
Client End client, client business, engager

If IR35 applies, all payments to the intermediary are treated as your employment income and the intermediary must pay any tax and National Insurance due. It ensures that you pay roughly the same amount of tax and National Insurance as if you’d been directly employed by the client.

IR35 looks at the underlying relationship between you (the worker) and the client for each contract or engagement. The facts of each engagement determine whether IR35 applies and not any label, description or job title. You need to assess what that relationship would be (your employment status) if there were no intermediary involved. You and your intermediary must assess the underlying relationship between you and your client for each of your contracts.

The intermediary is always responsible for ensuring compliance with the IR35 legislation when it applies. As a director of your limited company you must ensure compliance with all relevant legislation and take responsibility for determining whether IR35 applies for each of your contracts.

There can be significant consequences of ignoring IR35 legislation. Interest and penalties may be charged on any additional tax and National Insurance contributions due as a result of an HM Revenue and Customs (HMRC) enquiry into your situation. >>> HMRC Employment Status Tool <<<

Registered office: 61 Friar Gate, Derby, Derbyshire, DE1 1DJ

Adrian Mooy & Co is the trading name of Adrian Mooy & Co Ltd.  Registered in England No. 05770414

Registered to carry out audit work by the Association of Chartered Certified Accountants - auditregister.org.uk 8011438

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