There is one major self-perpetuating myth about IR35: that there is a way round it. Because the fundamental premise of IR35 relates to the actual, real, relationship between service provider and client, any number of dodges, third parties, contractual clauses and so on can′t hide the facts.
Ways to avoid the risk of IR35
If the working relationship between the service provider and the client would be normal employment, if it were not for the existence of an intermediary, then the contract is subject to IR35 and resulting tax and NIC payments. In short:
As a contractor, the only ways to remove the risk of being subject to IR35 are:
- To be a genuine independent consultant who is not using an intermediary purely for tax avoidance and can prove it
- To be employed through a good umbrella company and pay tax and National Insurance Contributions at source through PAYE – the contractor remains financially better off and, more importantly, knows they are "legal" and not affected by IR35.
To speak to one of our tax experts call 0800 434 6402.
