how do i know if im caught by IR35

**thunderlizard** · 31 July 2007, 21:46

sorry, but that is the un-quickest q in the universe.

**Euro-commuter** · 1 August 2007, 07:49

Originally posted by reddeagle

Quick q!

"If you are working through a limited company, you will pay yourself a monthly salary (many take a small salary). Those caught by IR35 will pay themselves a 'deemed salary'."

How do i know if i will be caught by IR35, whats the conditions that i need to check to see if it applys to me

...

The principle is easy: If the relationship between you and the client is such that, if you didn't have your Ltd Co in between, you would be seen as employed by the client, as far as tax and NICs are concerned.

Deciding whether that is true or not is the bit that all the fuss is about.

**The Lone Gunman** · 1 August 2007, 08:24

Originally posted by reddeagle

Quick q!

"If you are working through a limited company, you will pay yourself a monthly salary (many take a small salary). Those caught by IR35 will pay themselves a 'deemed salary'."

How do i know if i will be caught by IR35, whats the conditions that i need to check to see if it applys to me

...

No quick answer I am afraid.
You need to get your contract checked by an authority. HMRC provide such a service. Most people dont use them as it is like waving a red rag at a bull.
Even if your contract is OK HMRC may still decide that your working practice is different and you are IR35 caught. They can change their minds up to 6 years later.

Join the PCG and get one of their legal chaps to look at your contract.
Try and make sure you work to the contract.

HMRC web site provides info on how to judge if you are caught PCG provides advice on how to make sure you are not.

It is the uncertainty that we have been fighting against for 7 years now and it is still no clearer. PCG have near 1500 cases in court against HMRCs 4 and one of them may yet be appealed.

**reddeagle** · 1 August 2007, 08:24

Originally posted by Euro-commuter

The principle is easy: If the relationship between you and the client is such that, if you didn't have your Ltd Co in between, you would be seen as employed by the client, as far as tax and NICs are concerned.

Deciding whether that is true or not is the bit that all the fuss is about.

I understand, thanks. The limited company i have set up over here also has a presence in Ireland but registered there as irish limited company. i think that should help me out?

**TheFaQQer** · 1 August 2007, 08:44

Originally posted by reddeagle

I understand, thanks. The limited company i have set up over here also has a presence in Ireland but registered there as irish limited company. i think that should help me out?

IR35 is assessed on a contract by contract basis.

If you are based in the UK, then you need to pay UK taxes, whatever they may be.

**Ardesco** · 1 August 2007, 08:46

IR35 is all to do with the terms of your contract and nothing to do with the setup of your business.

You can never be 100% sure you are not caught by IR35 because the IR like to throw about FUD and they also like to try and move the goalposts.

If you take sensible steps and get your contract checked and have good working practices you will probably never have to worry about it.

IMHO IR is far more likely to go for somebody blatantly IR35 caught who has not tried to change contract terms/working conditions where they have a chance of winning, rather than go for somebody who has had his contract checked, done his best to tailor his working conditions to fit and runs his business as a business.

Then again when did common sense ever become involved when the IR are concerned....

**reddeagle** · 1 August 2007, 10:51

Originally posted by Ardesco

IR35 is all to do with the terms of your contract and nothing to do with the setup of your business.

You can never be 100% sure you are not caught by IR35 because the IR like to throw about FUD and they also like to try and move the goalposts.

If you take sensible steps and get your contract checked and have good working practices you will probably never have to worry about it.

IMHO IR is far more likely to go for somebody blatantly IR35 caught who has not tried to change contract terms/working conditions where they have a chance of winning, rather than go for somebody who has had his contract checked, done his best to tailor his working conditions to fit and runs his business as a business.

Then again when did common sense ever become involved when the IR are concerned....

Solid advice, thanks for this. i guess i need to get my self an accountant and join the pcg

**MickeyP** · 1 August 2007, 12:13

Originally posted by The Lone Gunman

Join the PCG and get one of their legal chaps to look at your contract.
Try and make sure you work to the contract.

As I understand it PCG do not offer a contract review service. They recommended using Abbey to me.

how do i know if im caught by IR35