IR35 Question

[d000hg]

I was reading a with interest about the IR35 legislation and I guess the key part is this:

The legislation ensures that, if the relationship between the worker and the client would have been one of employment had it not been for an intermediary, such as a service company or a partnership, the worker pays broadly tax and NICs on a basis which is fair in relation to what an employee of the client would pay. (http://www.hmrc.gov.uk/ir35/)

Now, I am setting up as a freelancer/contractor but I will not be using any agency or intermediary - I make contracts directly with my clients.
I have absolutely no idea if this immediately rules be out of evading IR35, or is better, or makes no difference. Of the 2 contracts I currently have, at least one states categorically that I am not an employee of my client - does this make any difference? What happens if some work I do would be considered as "employee" and some would not?

Many thanks.

[THEPUMA]

I was reading a with interest about the IR35 legislation and I guess the key part is this:
Now, I am setting up as a freelancer/contractor but I will not be using any agency or intermediary - I make contracts directly with my clients.
I have absolutely no idea if this immediately rules be out of evading IR35, or is better, or makes no difference. Of the 2 contracts I currently have, at least one states categorically that I am not an employee of my client - does this make any difference? What happens if some work I do would be considered as "employee" and some would not?

Many thanks.

The intermediary is your service company, not the agency. So the legislation can still apply, irrespective of whether or not you use an agency.

The fact that the contract states categorically that you are not an amployee, is not, in itself, a factor. Like the old saying goes, if it looks like a duck and quacks like a duck, it's a duck. So if you behave like an employee and your contract is not "IR35 friendly", you are potentially caught by the legislation.

If you have one contract caught and one not caught, you simply apply the IR35 legislation to the income arising from the caught contract.

[NotAllThere]

I understood that, before the invention of IR35, there was already such a mechanism in place regarding contracting directly through your limited company to a client?

But the same remedy applies either way.

[d000hg]

When does this all actually get sorted out? If I (or my accountant) fills in my tax returns ignoring IR35, do I wait to see what happens? Or do I have to get prior permission to do this? Is there anywhere on the forms to say "I am not eligible for IR35" or do we just wait for the taxman to check the numbers?

Looking at the list of factors on the IR website, I meet some "employee" points and some "self-employed" points. I work from home on my own computer, buying my own software/hardware, working the hours I choose under the agreement that I am "likely" to do X hours each week for each client.

[malvolio]

When does this all actually get sorted out? If I (or my accountant) fills in my tax returns ignoring IR35, do I wait to see what happens? Or do I have to get prior permission to do this? Is there anywhere on the forms to say "I am not eligible for IR35" or do we just wait for the taxman to check the numbers?

Looking at the list of factors on the IR website, I meet some "employee" points and some "self-employed" points. I work from home on my own computer, buying my own software/hardware, working the hours I choose under the agreement that I am "likely" to do X hours each week for each client.

I know we've said this before many times, but this is an RTFM moment.

As a starter for 10, look on here and on www.pcg.org.uk * and on SJD Accountancy's website. There is so much you don't know that you don't know, even if you're working direct (adn well done for acheiving that, BTW!)


*(and join them while you're there )

[d000hg]

I've been reading here but I will look at those other suggestions, thanks.

One last question on this subject until I've done some decent research - is this an area an accountant can help on? Is it a bit specialised or is it exactly the kind of thing they can help me with?