Stay Outside IR35
To stay outside IR35 is crucial for the financial health of contractors.
The new rules commence on 1st April 2020 which puts the onus on the contractors to decide if you are within or outside the scope of IR35 if you are a subcontractor operating through limited company.
Nothing is certain in an IR35 case but here we put together some factors that seem to point to Contractors being outside IR35.
Advice for Contractors (courtesy of the Special Commissioner)
Here are the pointers for ordinary contractors, that the Special Commissioner considers helps their case for being a small business rather than an employee. All of these have come out of judgments in IR35 cases at the Special Commissioners. Following these is crucial to stay outside IR35.
Special Commissioners Advice To Stay Outside IR35
- Vary your contract hours
- State the services you will provide in your contract
- Don’t have a fixed end date in your contract
- State the work you will do in your contract renewal
- Have a Substitution Clause in your contract
- Set up a company website
- Set up an office
- Pay your own traveling expenses
- Do something specific for a client company
- Have your company name on your badge
- Have your company name listed in the Internal Directory
- Have your company name in your email address
- Don’t use the company sports facilities
- No holiday pay or sickness benefits
- Use your own equipment
- Write a letter to your agency if they don’t pay on time
- Have your own company business cards
- Charge VAT to your client (individuals do not charge VAT
If you do all of those things, or even most of them, you will be able to stay outside IR35
if you believe the commissioners.
You may find however that companies are just blindly putting everyone inside IR 35 just to minimise risk to them, as they do not wish to carry out individual assessments.
If you wish to discuss this with us please call on 0114 2880775