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IR35

Contract Reviews | Appraisals | Advice

What is IR35?

IR35 affects all individuals who trade through a limited company and is a particularly niche area of tax legislation. Nasa Consulting is probably the leading IR35 practitioner company in the UK and continually advises individuals and corporate clients on their exposure to this tax.

IR35 is the common name for tax legislation introduced in April 2000 to remove certain tax breaks for freelance businesses.  We advise our clients on the pitfalls and issues to avoid when working out their IR35 status.

Any freelance worker not taking professional advice on their IR35 position from their accountant or solicitor is being negligent with their tax status (according to HMRC – July 2007) and can face further penalties and interest from HMRC.

What does Nasa Consulting offer?

Nasa Consulting can provide clients with an IR35 Appraisal to assess their risks for this tax.  This involves reviewing the contractual agreements signed up to by freelancers with their agencies or end clients.  A review of the persons working relationship with the client is also carried out before providing an assessment.  That assessment is then used to determine the end of year tax liabilities faced by the freelance worker and their company.

How do we tell you of your IR35 status?

Our IR35 Appraisal service consists of reviewing your relationship with your clients.  We then provide you with a Red, Amber or Green coding to indicate your exposure to IR35.  Code Red clients are advised to pay IR35 taxes, code Green clients are advised that they fall outside the scope of IR35 taxes while code Amber clients are advised where their IR35 risks are.

Please speak to us at Nasa Consulting if you wish for an IR35 Appraisal or to discuss in more detail your concerns with IR35.

What are the taxes of IR35?

If HMRC determine that the characteristics of an engagement with a client are those typical of an employee, rather than a supplier, you will suffer additional national insurance and tax which can amount to 30% of what you earn.  Being caught in an IR35 relationship therefore removes much of the financial benefits of freelance working and professional advice must be provided to establish your status.

How is IR35 status judged?

To judge whether someone is in an employment relationship or a business relationship with their employer/client needs a careful understanding of employment case law.  Over the last 60 years, court cases have provided us with critical indicators as to whether a person works for another as an employee or as a service supplier.  Recent court cases have given a lot more guidance on this issue and Nasa Consulting have specialists who follow and apply the court rulings in making IR35 judgments.  We continuously deal with HMRC on IR35 tax status and are very aware of the critical determents of who is liable to IR35 taxes.  In the seven years of IR35, we have not yet been incorrect with a contractors IR35 status.

IR35 Investigations

Should you be under investigation for IR35, Nasa Consulting can provide representation on your behalf. Our IR35 experts have been fortunate to resolve all cases in favour of our clients.  We will need to have a detailed discussion with you prior to accepting your case.

Please speak to us at Nasa Consulting if you wish for an IR35 Appraisal or to discuss in more detail your concerns with IR35.

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