IR35 Overview

This legislation was brought in with effect from April 2000. Basically it attempts to cut off the advantages of a limited company which are mainly in saving National Insurance and to some extent personal tax. It says that if the limited company was ignored would the relationship between contractor and client be considered one of employment or self employment. If employment then the legislation applies. The tests for determining employment/self employment status have been built up through case law. Although it is possible to go through a list of these ticking them off as you go the Courts maintain that this is not the correct approach and we are left with a very subjective exercise in determining if the legislation applies. This provides difficulty for the contractor but still more difficulties for the Revenue. The Contractors Accountant Ltd can provide guidance on your position and how to minimise your chances of being subject to the legislation.

The Revenue has issued their guidance notes, which, if you would like further background, can be found on . This gives an outline of the law as they see it and is specious to say the least. Even so it should be possible for most IT contractors and other professionals to negotiate their contracts to fall outside of the scope of the legislation following their guidelines, let alone what the law says. Most agencies have contracts that can avoid IR35 if appropriate. We set out below our suggestions on the construction of contracts. Bear in mind that these suggestions are from a taxation point of view and if you are in any doubt about your contractual obligations you are advised to consult a solicitor. We can recommend a solicitor if required.

In short we aim to take the hassle out of running your company while keeping your tax low and we are approachable. Our approach is very much "leave your problems with us". A list of the work we do is shown later. This is not exhaustive so if it’s not on the list then please ask. The full service is provided for a very competitive fixed fee. If you are interested in our services please call us for a discussion and we explain how we work and see if this suits you or send us an email.


Existing Contractor

Our limited company services include:

  • Maintenance of all accounting transactions and records
  • Payroll
  • End of year payroll returns
  • VAT administration, if registered
  • Dividend advice and declaration


Setting Up
The Company

Our new company services include:

  • Setting up a company
  • Salaries and dividends
  • Accounts
  • Company administration
  • Tax planning