IR35 Compliance

IR35 Compliance

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I have jsut been contacted by a potential client who said she falls within the IR35 compliance rules. Without much research into this area to ascertain if this is what I can handle, I was wondering if I do need a special qualification/expertise to handle IR35 cases? I am a qualified accountant and have been in practice doing general tax and accounting consultancy, but have never dealth with IR35 issues before.

I also need to know if I could be capable of servicing the client if I do some reading in this area or if I really need to get someone who is specialised in this area.

I would be very grateful for some guidance here.

Thanks

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By cathygrimmer
21st Oct 2009 13:18

No qualification needed!

It isn't that complicated - the difficult bit is usually deciding if the client falls within the IR35 legislation and, if they do, trying to convince them they do, as it will pretty much cancel out the tax advantages of operating through a company! There's lots of stuff on how IR35 works on the Internet if you've got time to plough through it (and if it's cost effective for you to do so) or make sure you have someone you can consult on any bits you can't understand. There is an issue with the timing of dividends and, in some cases, it is simpler for your client to just have all earnings paid through PAYE.

But the bottom line is don't take it on if you haven't got the time or the contacts to make sure you get it right!

Good luck.

Cathy

[email protected]

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By User deleted
21st Oct 2009 21:40

IR35 Compliance
Many thanks Cathy. I have started reading on it and its ok so far but will consider seeking advice where necesssary.

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By User deleted
21st Oct 2009 23:14

I would only comment that

applying IR35 is unhappily not a case of " pretty much cancel out the tax advantages of operating through a company" ;  it is worse than that, I'm afraid.

(I think that aweb, maybe Rebecca, did a comparative piece on tax effects (i.e.  IR35 cf to employment and diret self-employment) not long ago, so you may be able to search and find it

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By cathygrimmer
22nd Oct 2009 09:22

Tax disadvantageous

I quite agree with the previous poster that the client can end up in a far worse tax position (not to mention the professional fees!) under IR35 than through self employment. But some 'IR35' clients are not IR35 in respect of all the company's contracts hence I didn't want to say it is always a worse position.

In may cases the clients have no choice but to work through a company becasue of their clients' demands. So although it may be better not to work through a company, many are stuck with it - and, sadly, with IR35!

Cathy

 

[email protected]

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