IR35 - IT only or all contractors and am I self-employed?

[dkillen]

Hello

I've been doing fixed term contract work as a PAYE employee but this is the first time an agency has approached me for a contract as a Ltd company or through an umbrella company.

I'd already heard of IR35 and from what I've been reading, it refers a lot to IT contractors. So my first question is, are all contractors potentially subject to IR35 or just those working in IT?

If it is all contractors, then I assume when I receive my contract (assuming I get the job!) it will be a contract for services. This position is for a council near me who need additional headcount in payroll but don't have the funding for a permanent person. So I would be working as per the job description of a permanent employee.

I've looked at this page on the HMRC website - https://www.gov.uk/employment-status...yed-contractor - and I don't think I'm going to be a self-employed person, because I'll have to work as per the council's employment policies.

Sorry if I'm jumping ahead here, but the agent told me that if I went through an umbrella company, I wouldn't have to worry about IR35 but this doesn't seem to be the case from what I've read. I want to make sure that I know what I'm doing before I go further with this.

thanks in advance

[Lance]

I'd already heard of IR35 and from what I've been reading, it refers a lot to IT contractors. So my first question is, are all contractors potentially subject to IR35 or just those working in IT?

Locum doctors in the NHS also.
It could be any LTD company but IT is the most common use of PSCs and is also more in the news for IR35 wins/losses.

[malvolio]

IR35 still works for umbrella-using workers, but since you are paid net of PAYE and NICs it doesn't have any impact at all. Best way to go to get started IMO.

Have a look at the guides over there --> and go to Self-Employed & Freelancer Association | IPSE and download their Guide to Freelancing. It will cover most (if not all) your immediate questions and works for anyone working for themselves.

[chopper]

This position is for a council near me who need additional headcount in payroll but don't have the funding for a permanent person. So I would be working as per the job description of a permanent employee.

I've looked at this page on the HMRC website - https://www.gov.uk/employment-status...yed-contractor - and I don't think I'm going to be a self-employed person, because I'll have to work as per the council's employment policies.

Supervision, Direction & Control is a key test of IR35. From what you say, you would be IR35 caught on that alone.
Also, you say 'council', which means automatically within IR35 anyway.

Even without IR35, there is a point where using an Umbrella is more efficient than going the Limited Company route, and I imagine by 'payroll' you are probably under that point.

So all this says to me you should forget the Limited Company and just go Umbrella.

[BigRed]

I've seen threads in the past saying the three pillars were RoS, SDC, and MoO; if ANY OF THE THREE didn't apply you were outside, if all three apply then you have a fight on your hands. People now seem to suggest that failing just one dooms you.

Has this changed?

[northernladuk]

I've seen threads in the past saying the three pillars were RoS, SDC, and MoO; if ANY OF THE THREE didn't apply you were outside, if all three apply then you have a fight on your hands. People now seem to suggest that failing just one dooms you.

Has this changed?

I'd guess the answer is we don't really know. RoS has been proven a sham in a case but has been ignored (I think) and there are many other factors. How much D&C, part and parcel etc. They aren't cast in stone or silver bullets.

Best thing you can do is have your contract and WP checked, understand enough to stay outside IR35 and avoid looking like a permie on site. Worry about the rest when the letter hits your door mat.

[Jessica@WhiteFieldTax]

I'd guess the answer is we don't really know. RoS has been proven a sham in a case but has been ignored (I think) and there are many other factors. How much D&C, part and parcel etc. They aren't cast in stone or silver bullets.

Best thing you can do is have your contract and WP checked, understand enough to stay outside IR35 and avoid looking like a permie on site. Worry about the rest when the letter hits your door mat.

But OP is proposing a Public Sector contract anyway?

[pr1]

OP didn't mention LtdCo at all either

Go umbrella and you won't have to worry about IR35, what you get paid in your bank account you'll keep and no further worry necessary

[pscont]

Best thing you can do is have your contract and WP checked.

Care to explain what authority do QDOS and IPSE (and other IR35 checkers) have on that matter? Will HMRC obey their IR35 assessment?

[cojak]

Care to explain what authority do QDOS and IPSE (and other IR35 checkers) have on that matter? Will HMRC obey their IR35 assessment?

IPSE (and Abbey Tax) are prepared to put up a fight and challenge HMRC, often that's all that's needed for HMRC to move onto easier pickings.