IR35 is a serious issue, but one that can also be confusing. Accountants in Goole or wherever you happen to be based will be able to help clarify anything you need to know, but what questions should you ask?

Do the changes apply to me?

The first piece of information you need to know is exactly what your IR35 status is. The changes to the rules were introduced by HMRC to stop people using intermediaries like limited companies to avoid tax. Determining whether you are in or outside of it is essential to stay within the law, so outline your work situation to your accountants and ask them what your IR35 status is.

What are personal service companies?

A personal service company is a term invented by HMRC to describe limited companies created by contractors where they are the director and also – generally – the only shareholder. The contractor is also in sole control of the bank account for a personal service company, with HMRC viewing it as a way of avoiding tax and National Insurance payments on income.

How can I pay if I am liable?

If you fall inside IR35, you should ask your accountants what the best payment option would be for you. Among the choices available are to pay directly through PAYE, have your umbrella firm pay based on your rate per hour or have National Insurance and tax deducted from the money received by your personal service company.

At Adaptive Accountancy, we are experts in IR35 and business taxes. Call now for help.