Personal & IR35

It's common to find financial consultants, IT consultants and others offering their services through a limited company. They'll probably be the only director and the only shareholder.  The company invoices the client and the owner/manager takes a small salary from the business with the balance being taken as dividends. 

There are good practical and commercial reasons for working in this way which suits many and they can also lead to considerable tax savings compared to working as a direct employee of a company.

HMRC is not keen on these arrangements however, and where the relationship between the working director and the end client is actually deemed to fall under the IR35 rules, a significantly larger tax bill may arise. The regulations concerning these rules are often referred to as 'IR35' as they were put out in the 35th press release of that year (1999). Visit HMRC's website for more information.

We can guide you as to how you should structure the relationship with your client and what terms to include in your contract so that the arrangements fall outside the scope of IR35 and the earnings will be taxed as desired. We can also review current contracts to see whether there is an IR35 risk, what the consequences might be, and how to minimise this risk.

We offer all-inclusive services for contractors including:

• Company formation
• Company secretarial services
• Annual Accounts
• Company and personal tax returns
• Bookkeeping
• VAT Returns
• PAYE Returns
• Review of contracts for IR35 status