What is IR35 and how does it affect me?

Basically IR35 is the legislation that determines whether you are working as a genuine freelancer, contractor or consultant, or whether you are, in practise, more of an employee ‘disguised’ under freelance status.

Essentially it is the difference between being ‘self employed’ or what the tax office would consider closer to ’employed’.

If you are ‘outside’ IR35 (ie considered genuinely self employed) you benefit from tax reductions, but if you are ‘inside’ IR35 you have to pay similar levels of tax to that of an employee.

It’s important for you to know where you fall, as it determines how much tax you are obliged to pay.  However, it can be quite complicated to work this out as all industries and professions are slightly different and therefore no blanket rule can be applied.

If you are not sure whether or not this affects you, we can offer advice and, if necessary, arrange an IR35 contract review for an additional fee of £80.

Contact us with any questions

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