Another IR35 question but from a different perspective

[Dean]

I'm just returning to contracting and when I contracted previously IR35 wasn't a problem as it didn't exist so I'm not completely up to speed with all the rules and regulations.

I'll be using a Ltd company that my better half and I established a couple of years ago. She's already been using the company to provide freelance web work and to provide training to a number of clients. I'm presently working with her on some development work (she does the design, I do the coding) and we're keen on building the company.

If I take on a contract, how will I be placed for IR35? My thinking up to now has been that if the contract is within IR35, the earnings from that contract will be subject to taxation/NI in full but any other earnings the company makes will remain outside IR35. Is that correct?

Would the other work I'm undertaking and the jobs my other half does be taken into account when determining whether my contract is inside or outside of IR35? (In that we're clearly trying to build a business, not just running a PSC, if you see what I mean.)

[Hex]

IR35 is judged on a contract by contract basis. So you can have one contract inside IR35 while you are doing other work in the same company that is outside.

So, if your new contract is judged inside it will not affect your other work and the fact that you do other work in that company will not affect whether or not your new contract is caught by IR35.

[Gonzo]

Would the other work I'm undertaking and the jobs my other half does be taken into account when determining whether my contract is inside or outside of IR35? (In that we're clearly trying to build a business, not just running a PSC, if you see what I mean.)

It would help your defence that you are "in business on your own account" and that IR35 does not apply at all, but it is still possible that an individual contract is deemed to be inside IR35.

However, with the correct contractual terms in place and working practices that reflect the contract, then there is no reason for the contract to be within IR35 in the first place.

[Dean]

Thanks guys.