Contractors & IR35

Lambert Chapman LLP are IR35 Consultants offering advice to Professional Contractors in Essex.

There is an increasing demand for specialised accountants trained in freelance issues such as IR35, contract reviews, S660A and PAYE. Our services in this area can be summarised as follows:

• Status Issues

Is Fred really self employed or does his contractual arrangements really make him an employee of the organisation to whom he provides his services? This is an area of tax law that often comes to light at the time of an HM Revenue & Customs (HMR&C) PAYE review and can prove costly to the taxpaying parties if the wrong arrangements are in place.

With the new Construction Industry Scheme requiring a monthly declaration being signed and submitted to HMR&C more visits are forecast and more fines issued if errors are discovered.

• IR35

IR35 was introduced in 1999 to prevent those operating through a Limited Company and often via an agency drawing large dividends and a low salary when without the intermediary their status would have required them to be an employee of the end user to whom the services are provided.

Many contractors believe that their contract is “IR35 proof” and continue to draw the dividends. But are they correct in this assumption and may a substantial tax bill be waiting for them around the corner? There are also those contractors who signed up to IR35 but now may be with a different agency under a different agreement and so may have the flexibility to remove themselves from the scheme.

The opportunity of taking specialist advice to determine whether IR35 is applicable to you as a Contractor may well represent money well spent in identifying risks or opportunities in this most difficult of areas.

Useful Links:

> Changes to Off-Payroll Working Rules (IR35): Important changes to employment taxes with effect from 6 April 2020

> Guidance: Tax avoidance schemes aimed at contractors and agency workers

If you require any assistance in this area, speak to our expert Duncan Forsyth on 01376 326266 or email him.