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info@commonwealthcontractors.com‘Right to Control’, i.e. What work is done, Where work is done, When work is done and how work is done, is an important aspect of IR35 Contracts. If the Client has significant influence over all four you will likely be considered ‘Inside IR35’, therefore you won’t be able to take tax efficient Dividends.
Tag Archives: Contractor Limited Companies
Contract Terms and Conditions are the most important initial factor in determining IR35 status. If you fail to address the contract and ensure that terms are considered ‘Outside IR35’ you could leave yourself open to an IR35 Investigation and possibly a large tax bill in years to come.
If you go into business with your own Contractor Limited Company you need to know which of your contracts are Inside IR35 and which are Outside IR35. If you take Dividend Income from a contract Inside IR35 you could wind up with a large tax bill at an HMRC Investigation.
If you want to work as a professional Contractor in the UK you need to know about IR35… especially if you’re thinking about going into business with your own Contractor Limited Company!
If you’re planning to work as a professional Contractor you need to make sure that you’re not using a ‘Managed Service Company’, otherwise you could find that you face a large Income Tax and National Insurance bill down the line.
Section 660a is generally considered to be old news right now however it was a hot topic under the old Labour Government who threatening to bring in new ‘Income Shifting’ legislation to make it more difficult for family businesses to split profits between family members in order to gain a tax advantage
If you run a Contractor Limited Company it will normally be your responsibility to deal with Timesheets, Client Invoices and Payments. As part of genuinely ‘running a business’ you should demonstrate that you have full responsibility for these actions together with managing the Limited Company Bank Account.
If you’re going to go into business with your own IT Contractor Limited Company the chances are that you will be contractually required to hold sufficient Professional Insurance with a reputable provider. Please note that if you use an Umbrella Company you will be covered by the Umbrella’s policy.
If you are going to be working on Contracts which are ‘Outside IR35’ you may be interested in registering your own Contractor Limited Company and structuring your income to gain a tax advantage. To register a company you, or your accountant, will need to file a Limited Company registration with Companies House.
The IR35 Status of contracts you are working further to will have a major implication on the way you structure your Contractor Limited Company Income. If contracts are ‘Inside IR35’ you need to pay employed levels of tax, however, if contracts are ‘Outside IR35’ you can structure your income to achieve a tax advantage by […]