LLP and IR35

LLP and IR35

Didn't find your answer?

I was an IT contractor when IR35 came in and managed, with difficulty, to avoid being caught by it. I am now employed by a IT company (i.e. a normal company in IT, not an umbrella or other service company). I am frequently placed on long assignments with clients where I suspect, if I were still a contractor, I would have difficulty escaping IR35. However, because I am salaried and on PAYE, there would be no point in designating me an employee of my employer's client.

My employer is now converting from a limited company to an LLP, and I am being offered the chance to become a fixed share member. As I understand it, I will now be considered to be self-employed.

My question is, will HMRC now start to take an interest in my IR35 status? Might they treat my "employer", the new LLP, as an intermediary and consider that I am in disguised employment with the end client?

Thanks for any help or suggestions of where to look for an answer.

Replies (1)

Please login or register to join the discussion.

By Steve Holloway
08th Feb 2011 14:01

Yes they could ...

a partnership can be an intermediary in the same way as a personal services company as far as IR35 is concerned. The rest is obviously in the detail. I suspect the final bullet point will be the one that you have to work around in some way?

If your services are supplied through a partnership of which you are a partner, and the partnership does not meet the definition of a Managed Service Company, The IR35 rules apply if:

 you (or your family*) are entitled to 60 per cent or more of the profits of the partnership, or

all or most of the partnership's income comes from providing services to a single client, or the profit sharing arrangements in the partnership are designed to ensure that you receive an amount based on the payments received for your services to clients.

 

Thanks (0)