IR35You may vaguely be aware of IR35, never heard of it or already know all the intricacies of it. In essence it is a mechanism for HMRC to address potential pseudo-employee situations which deprive HMRC of tax payments. This was to address a trend in the 1990s when a large number of IT professionals became contractors.

IR35 Determining Factors

When HMRC review a contracting situation they are looking for various indicators, the following is an extract from the HMRC website that helps you to decide whether your contract falls under IR35 or not.

Would I Have Been An Employee Of My Client?

The IR35 rules only apply if you would have been an employee of your client, had it not been for the existence of your Personal Service Company or partnership.

If you can answer ‘yes’ to most of the following questions, you would probably have been an employee of your client for the contract in question and therefore within the new rules.

  • Do you work set hours, or a given number of hours a week or a month?
  • Do you have to do the work yourself rather than hire someone else to do the work for you?
  • Can someone tell you at any time what to do, when to work or how to do the work?
  • Are you paid by the hour, week or month?
  • Can you get overtime pay?
  • Do you work at the premises of the person you work for, or at a place or