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Contractors and IR35

What are Contractors and IR35?

Contractors and IR35 refer to UK tax rules designed to ensure individuals working through intermediaries, like limited companies, pay the correct taxes if they would otherwise be considered employees. Known as the off-payroll working rules, IR35 determines whether a contractor is “inside IR35” (treated as an employee for tax
purposes) or “outside IR35” (treated as self-employed). Since reforms in 2017 and 2021, clients now decide IR35 status, impacting contractors’ take-home pay and increasing compliance responsibilities for businesses. At Tax Advisors, we provide expert guidance to navigate these rules effectively.

Why is IR35 Compliance Essential?

IR35 and the Off-Payroll Working Rules (Chapter 10, ITEPA 2003) have significant implications for both contractors and businesses. Misclassification or non-compliance can lead to hefty tax liabilities, financial instability, reputational damage, and operational disruptions. At Tax Advisors, we provide expert guidance to help you navigate these complexities and ensure compliance.

Key Risks for Contractors:

  • Avoid significant tax liabilities, including income tax and NICs.
  • Protect your take-home pay and financial stability.
  • Prevent costly HMRC investigations and backdated taxes.

Key Risks for Businesses:

  • Ensure accurate IR35 status determinations to avoid liability for unpaid taxes.
  • Protect your reputation and client relationships.
  • Minimise operational disruptions caused by HMRC investigations.

Who We Are

Tax Advisors is a leading UK-based tax consultancy

Tax Advisors is a leading UK-based tax consultancy powered by a team of Chartered Tax Advisors (CTA), Chartered Accountants, and Former HMRC Inspectors. With decades of combined experience, we specialize in providing expert tax solutions tailored to individuals, businesses, and organizations’ unique needs.

  • At Tax Advisors, we combine technical expertise with a client-focused approach, ensuring every solution we provide is aligned with your financial goals.
  • Trust us to transform tax challenges into opportunities for growth and success.

Our team's deep understanding of the UK tax system

Our team’s deep understanding of the UK tax system and proactive approach allow us to deliver tailored solutions that ensure compliance and optimize your tax position. Whether navigating complex cross-border tax issues, seeking to minimize your tax liabilities, or facing an HMRC investigation, we provide the clarity, confidence, and results you need

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Key Features of IR35 Services

Navigating the complexities of IR35 and off-payroll working rules can be challenging for both contractors and businesses. At Tax Advisors, we provide tailored solutions to ensure compliance, protect your financial stability, and minimise risks. Our expert team helps you accurately determine IR35 status, avoid costly penalties, and optimise your tax position.
Accurate Status Determinations:
Expert assessments to classify contractors as "inside" or "outside" IR35.
Tax Efficiency:
Strategies to minimise income tax and NICs for contractors.
Compliance Support:
Assistance with HMRC guidelines and Status Determination Statements (SDS) for businesses.

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Tax Advisors FAQs

Frequently asked questions

  • What is the difference between inside and outside IR35?
    • Inside IR35: You are deemed an employee for tax purposes,
      resulting in higher income tax and NICs.
    • Outside IR35: You are considered genuinely self-employed, allowing
      you to benefit from tax efficiencies.
  • How does HMRC determine IR35 status?

    HMRC assesses IR35 status based on three key principles:

    • Control: How much control the client has over your work.
    • Mutuality of Obligation: Whether the client is obliged to offer work
      and you are obliged to accept it.
    • Substitution: Whether you can send a substitute to perform the
      work.
  • Can I challenge an IR35 determination?

    Yes, you can challenge an IR35 determination through HMRC’s dispute
    resolution process or by appealing to a tax tribunal. Our team can provide
    expert representation and build a robust case on your behalf.

  • What are the off-payroll working rules?

    The off-payroll working rules shift the responsibility for determining IR35
    status from the contractor to the client in the private and public sectors.
    Businesses must issue a Status Determination Statement (SDS) for each
    contractor engagement.

  • How can Tax Advisors help me stay compliant?

    We provide comprehensive IR35 solutions, including status assessments,
    contract reviews, tax planning, and dispute resolution. Our goal is to ensure
    compliance while maximizing your tax efficiency.

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