IR35 Review for contractors

IR35 Contract Review

JSA offers all contractors a comprehensive IR35 status review, conducted by a team of specialists, designed to give you peace of mind and reassure you whether you are ‘caught’ or ‘not caught’ by the IR35 legislation.

What is IR35?

IR35 is the legislation introduced by the Government in 2000 designed to assess anyone working in the temporary, freelance and contract market. The aim of the legislation is to prevent contractors from disguising the true nature of their working status, whether that is done knowingly or not.

At JSA, our team of experienced professionals will review both your contract and your working practices to determine your IR35 status.

There are two possible outcomes for the IR35 contract test:

  • ‘Caught’ - this is when the candidate is working as though they are an employee of the client
  • ‘Not Caught’ - this is when the candidate is working as though they are a true freelance professional

So how do these outcomes affect me?

If you are contracting under your own limited company, your IR35 status governs the way you should be taxed.  It decides whether you are able to draw a dividend or not.  A dividend is the most tax efficient way to remove income from a limited company.

If you are ‘not caught’ by IR35, then you are able to process dividend payments through your limited company should you wish.

If you have been deemed ‘caught’ by IR35, then you need to have all payments taxed as if you were a PAYE employee for that particular contract.

The outcome of IR35 can therefore dramatically affect the percentage of take-home pay you receive.  It also limits the decisions you can make regarding your remuneration.

Myth: IR35 doesn’t apply to Umbrella Contractors

This is not true. All candidates working in the temporary, freelance and contract markets are covered by the legislation.

Most umbrella services are taxed according to PAYE guidelines.  Contractors employed by an umbrella company are not trying to disguise their employee status.  As umbrella company employee, you are confirming that you are an employee, and taxed accordingly, so the government has no need to assess you.

Is there anything else I need to be aware of?

Yes, the IR35 legislation is very complex, so here are a few important things to be aware of:

  • IR35 applies to each contract and not to you as an individual.  So it’s not a matter of thinking, ‘Am I caught by IR35’? It is more ‘Is this particular contract caught by IR35’?
  • It is common to have income from two different sources at the same time, one being caught and the other not.
  • You have no say in whether or not you are affected by IR35. If you’re a contractor, it affects you!
  • The terms and conditions of your contract, as well as your working practices, will determine the IR35 contract status for you.
  • As a director of your own company, determining your IR35 contract status is your responsibility.  We strongly recommend that you seek professional advice to help guide you through the process.
  • When seeking advice, we also recommend you ask for a breakdown of why a decision of you being ‘caught’ or ‘not caught’ for a particular contract has been made.  
  • “Because my accountant says so” is not a defence HMRC will accept.  You must justify your position.

Need an IR35 contract review?

Determining whether you are caught by IR35 or not is your responsibility, but it doesn't mean you are alone. The only way to be sure whether your contract falls inside or outside IR35 is to have it reviewed by a specialist.

JSA's IR35 contract review team has extensive knowledge of, and experience in, assessing your contract and determining your employment status. 

Before you sign anything, we urge you to call or email our team to receive a FREE, no obligation, consultation. We will talk you through any contractual issues you may have, explain the best trading options for you and let you know which business expenses you can claim.

Our IR35 contract team is awaiting for your call!