IR35 Explained Within 5 Minutes

[@LondonCoder]

IR35 rules apply to any contract for work carried out in the UK, regardless of the location of the company hiring the contractor. This means that even if the company does not have a UK presence, IR35 can still apply if the work is performed in the UK. - is this correct?

[@Theaccountancypartnership]

Hey there, thanks so much for your question! We would strongly advise that you get an IR35 determination, check here for more info: www.gov.uk/guidance/check-employment-status-for-tax Whilst as a contractor/agency you may not be based in the UK, they are, and this can therefore have an impact on IR35 as if the agency is offshore then the liability moves to the next person, which could make them liable. If you have any more questions feel free to call us 📞 020 3355 4047 📞

[@HillaryCowley]

Hi How does IR35 work when contractors use subcontractors to do the work?? I am due to start as a subcontract to a main contractor who is contracted to a company which has deemed the contract to be within IR35.... If the Company pays the NI on the money paid to the main contractor ....I am also obliged to then have NI contributions deducted from my money earned? what tax gets paid where and by whom?

[@Theaccountancypartnership]

Hi @hillarycowley 👋 Thanks for the question. The relationship would be between them and their contractor - so an IR35 determination would need to be done on that relationship. they can use the CEST tool to help them with the determination : www.gov.uk/guidance/check-employment-status-for-tax. Typically if they are trading as a Sole Trader, they would pay tax and NI on their earnings anyway so this is outside IR35. IR35 is when it is ran through a limited company thus disguising the employee! We hope this helps!

[@martyn420]

I'm an IR35 lawyer and strongly advise against the use of CEST under any circumstances; it doesn't satisfy the statutory definition of reasonable care in the context of the off-payroll legislation and misapplies mutuality of obligations.