IR35 is a UK tax legislation that was introduced in 2000 to tackle tax avoidance by individuals who work through their own limited companies or other intermediary structures, but who in reality are deemed to be employees.
IR35 is a UK tax legislation first introduced in 2000, although it has undergone several reforms since then. IR35 targets what HMRC considers disguised employment; those who who work through their own limited companies or other intermediary structures, but who in reality are deemed to be employees of their clients for tax purposes. The legislation aims to ensure that such individuals pay broadly the same amount of tax and National Insurance contributions as regular employees would pay.
What options do I have if the contract is inside/outside IR35?
Your options for payment will depend on the IR35 status of the role, which the recruitment agency or client should be able to tell you. If your contract is outside IR35 then you can choose to operate via your own LTD company, should you wish.
Payment options for outside IR35 contracts:
- Setting up/using an existing LTD company to invoice the client, income would be paid to your LTD company bank account. Nasa Consulting can support you with this. You'd have your own personal accountant to advise on any questions you might have/
- Using an umbrella company. In this scenario you would be an employee of our sister company NASA Umbrella and thus we would be responsible for your tax and NI and the paying/reporting of these taxes to HMRC.
- Agency PAYE, if this is an option.
Payment options for inside IR35 contracts:
- If your contract is to be deemed inside IR35 then you must be paid as an employee via a payroll, either via your agency's payroll or an umbrella company.
- For those who switch between inside and outside roles, we do offer a Hybrid solution which means you can keep your company up and running with Nasa Consulting, and use Nasa Umbrella for free whilst you need to.
You can find out more about our Hybrid service here.
Who decides the IR35 status of a role?
From 6 April 2021, new rules for off-payroll working were introduced for medium and large businesses in the private sector, this meant that the responsibility for determining the IR35 status of a contractor has shifted to the client
Nasa Consulting are considered one of the strongest UK advisers on IR35. We can provide IR35 guidance to put you in the best possible position to speak with your agency / end client during negotiations.
Still have questions?
You can get in touch with our onboarding team using the details below.
📞 01179297683 - Option 1