What is IR35 and why is it important?
What is IR35?
IR35 is a tax law introduced to combat tax avoidance by workers supplying their services to clients via an ‘intermediary’ (such as a limited company) who would otherwise be an employee.
Why is IR35 important?
It is important you establish whether your contracts are affected by IR35 rules. HMRC can investigate your arrangements at any time, which can be time-consuming, costly and highly stressful. HMRC can also go back up to six years and evaluate past contracts to see if the legislation applies.
What does it mean?
If IR35 applies to your contract, it means you pay the same Income Tax and National Insurance contributions (NICs) as you would if employed directly rather than contracted to work through your limited company.
The financial impact of IR35 can be significant. You may find your future earnings are reduced and have to pay Income Tax and NICs retrospectively.
What if I’m a public sector worker?
Important changes for workers in the public sector were introduced by HMRC on 6th April 2017. Find out more about the impact of these changes.
How can Crunch help?
To assess your own risk, try the Crunch IR35 calculator. However, please be aware that the results of this test are only to be used as a guide.
After you’ve completed the IR35 calculator, let your Crunch Client Manager know the results so we can advise you on what to do next. If your score was in the medium or high-risk category, we strongly advise you to take action as soon as possible.
We offer the following IR35 services:
IR35 Contract Review - £59.50 + VAT
IR35 Enhanced Contract Review - £129.50 + VAT
Express IR35 Enhanced Contract Review - £249.50 + VAT
This will help determine your IR35 status more accurately and will assist in helping you to comply with the Government’s regulations in this area.