egos® – the IR35 services page
Note: the IR35 legislation is now to be found in
the Income Tax (Earnings & Pensions) Act 2003 sections 48-61 – copies
can be found here.
Comment on the Dragonfly case (Sep 2008)
The Egos detailed IR35 pages – a thorough examination of the
legal issues
Services offered to Contractors
Agency contracts, and clients' own
contracts – pre-signing review and amendments
Direct contracts - drafting
Opinion on IR35
status of existing contract / working arrangements, taking into account the
latest legal developments, and the background of your business (and including
suggestions focused on your particular situation) for improvement
Preserving evidence of the reality
– the Confirmation of Arrangements 
The
IR35 position of the income from a contract depends on the overall picture
created by the reality, viewed against the background of the obligations and
responsibilities laid down by the contract, and with that in turn viewed
against the overall background of the business carried on by the Contractor.
PAYE Audit support Increasingly,
Contractors are finding themselves subject to PAYE audits. Backtaxes if you
are found to have accounted wrongly for IR35 can be crippling to any Contractor
– let alone the potential penalties.
Conversely, paying tax under IR35 if you are not in fact liable to do so
is throwing a large amount of money down the drain. It’s crucially important to (a) take the
right decision on whether or not to position yourself inside or outside IR35,
and (b) if you choose that position to be outside, to do everything you
reasonably can to secure that position.
IR35 cases –
case index
Services offered:
For
Contractors:
Agency
contracts, and clients' own contracts
If you are about to take a new
contract, we can review its terms, and deal
with IR35-related changes in the course of the review
We will consider the overall picture (ie the
contract – document, and reality - viewed against the background of your
business as a whole), and we will give our clients the best and most accurate
opinion and risk assessment that we can.
We will do our best not to err at all – whether on the side of
caution, or otherwise – since we believe that our clients will be in the
best position to take their own decisions once they have proper advice on their
whole situation; and that advice is what
we aim to provide.
Direct
contracts
If you have the opportunity to work
directly, we can draft a suitable contract
for you.
Opinion
on IR35 status of existing contract
Reasoned written
opinion, based on the currently understood principles as laid out in the most
recent case law. Cost £250.00,
based on a straightforward review of one contract - for more complex situations
the cost will be discussed. This is the
one you are likely to need for your year-end accounts, and will also be
sufficient for audit purposes.
To proceed we'll need
a full copy of the contract (email, or fax to 020-8020-0211), and your replies
to a questionnaire which you can
download, or which we’ll email on request.
The IR35 position of the income from a contract depends
on the overall picture created by the reality, viewed against the background of
the obligations and responsibilities laid down by the contract, and with that
in turn viewed against the overall background of the business carried on by the
Contractor.
It is
therefore important both to establish what the reality in fact is, and (so far
as practicable) to preserve the evidence of that.
Certainly if
they investigate, determining what the reality actually is will be one of the
first things the Revenue seek to investigate.
This can give rise to problems – particularly where the Contractor
is unable to provide anything, they may well seek direct contact with the
Client, often by telephone. This in turn
means that they are making up their minds, on the basis of a conversation to
which you yourself were not a party, and on the basis of information you have
not yourself been told (and are therefore in difficulties in arguing with)
– and that information may have been given to them by someone who had no
actual knowledge of what happened in relation to your contract, and is simply
replying based on ignorance and/or assumption, rather than hard fact. The trouble is that if the Revenue are told
what they want to hear, you then have a much harder task in persuading them
that they have been misinformed.
What is
emerging as a useful way to preserve evidence of the reality is the form of
Confirmation of Arrangements agreed between the Revenue and the PCG. That form itself is however less than
perfect, and contains some ‘trick’ questions, where a reply made without full understanding
of all the issues may be unduly prejudicial;
the range of multiple choice answers the form provides is also limited,
as all of these are often less then accurate.
Not taking all steps to complete this form in the best way risks losing
a valuable opportunity to secure an ‘outside IR35’ position, and in some cases
may literally be something that makes all the difference.
Drafting a
Confirmation of Arrangements in order to give the best support to an ‘outside
IR35’ position can therefore be somewhat of an art in many situations, and it
may be better to have the form expertly drafted.
We can offer
this service, and if you would like to pursue it we would need from you (at a
time when the reality is clear) (a) a copy of the contract as actually signed,
(b) your replies to our own questionnaire
which you can download, or which we’ll email on request, and (c) your own first draft of the Confirmation
of Arrangements (a blank of the form is in the questionnaire).
Cost: a fixed
price of ₤250.
PAYE
audit support
Increasingly,
Contractors are finding themselves subject to PAYE audits. Back taxes if you are found to have accounted
wrongly for IR35 can be crippling to any Contractor – let alone the
potential penalties. Conversely, paying
tax under IR35 if you are not in fact liable to do so is throwing a large
amount of money down the drain.
1
do all that is necessary to get and keep your house in order
on an ongoing basis – don’t play the ostrich and
kid yourself that it can’t happen to you – it can, and quite possibly it
will; and
2
if you do get notice that the Revenue intend to carry out a
PAYE audit, if you possibly can, get proper advice straightaway –
don’t wait until after the Revenue’s visit before doing so
We can draft new
IR35-friendly standard terms of business for you, taking into account the way
in which you choose to do business, and the things that help to
make your own business unique - and by doing so, we can help you to gain additional
business and market share from those who are not prepared to make these
changes.
If
you think we can help, mail us and we'll
discuss it.
No liability is
accepted for any inaccuracy in the information in these pages - see
full disclaimer
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