Beat IR35 - avoid being unnecessarily trapped

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3. Satisfy as many as possible of the "self employment" tests:

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Simply ticking as many of the boxes of the "self employment" tests will not on its own defeat IR35. It is the general flavour of your arrangements that the courts will consider - should your case ever get that far.

4. Select your intermediary carefully:

You should read our "Umbrella" and "Composites" and "Limited Company" sections and decide which route is the most sensible for you. For the long term contractor, we suggest that the Limited Company route is the most sensible.

* * MANAGED SERVICES COMPANY UPDATE * *

We have updated the sections on umbrella and composite companies for the MSC rules which now force umbrellas and composites (and some other setups similar to them) to pay the full amount of tax and NIC as if the self employed contractor were an employee. Please also check our Managed Service Companies (MSC) section.

5. Buy insurance:

There are a number of insurers now who offer policies to help contractor's deal with the uncertainty of IR35. It is possible to purchase policies that will indemnify you against the professional costs of defending an IR35 investigation. We would strongly recommend the purchase of such a policy. In the event of an IR35 enquiry from the Revenue you would be able to hire the best available advisor to help defend your case.

Some insurers also offer policies that indemnify against any outstanding tax, NIC, interest and penalties that are suffered in the event that an IR35 enquiry is lost. These are slightly more expensive.

Summary:

We have highlighted the main things we think you should do to reduce your vulnerability to IR35. Indeed, the Revenue have a poor record at enforcing IR35 so contractors should be encouraged by this. It is entirely possible for the genuinely self employed contractor to operate outside IR35.

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Full index of pages:

Home Page IR35 Background - page 1 IR35 Background - page 2 IR35 Background - page 3

IR35 Rules - page 1 IR35 Rules - page 2 Beat IR35 - page 1 Beat IR35 - page 2

Beat IR35 - page 3 Beat IR35 - page 4 Ltd Company - page 1 Ltd Company - page 2

Ltd Company - page 3 Ltd Company - page 4 Umbrella Companies - page 1

Umbrella Companies - page 2 Composite Companies - page 1 Composite Companies - page 2

Composite Co - page 3 Composite Co - page 4 MSC - page 1 MSC - page 2 IR35 Insurance

IR35 Investigations - page 1 IR35 Investigations - page 2 Contracts - page 1

Contracts - page 2 Contracts - page 3 Resources 1 Resources 2 Resources 2 Sitemap