New HMRC IR35 Flowchart Published

There have been a number of changes recently to IR35 rules. This legislation seeks to ensure that an individual who would have been an employee had they been providing services to their client directly, they pay broadly the same tax and NI as an employee. Often such a worker will provide services not directly to their client but via another structure; typically the worker's own limited company. Such practice is commonplace in some sectors, for example IT and Telecomms.

HMRC have recently published a flowchart for client organisations to help them determine whether individuals undertaking work for them fall within the scope of the IR35 rules. Workers providing such services may find it helpful to be aware of the flowchart when they are in discussions with clients regarding their contracts. The flowchart can be found at the link below.

HMRC IR35 Flowchart

If a worker is contracting through an umbrella company, the IR35 rules do not apply as the umbrella company will usually deduct PAYE tax and National Insurance from the worker's pay. You may find our separate article on umbrella companies helpful, which you can find here.

Comment

This is a complex area and you should seek professional advice if you believe you might be affected by IR35 legislation.

If you are affected by the issues here and would like to discuss how it might impact upon your Financial Planning arrangements, please do get in touch.

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