We are not Solicitors and cannot give legal opinions on your contracts we do however have a wealth of experience reviewing the status of contracts and we always review each and every contract that you secure to ensure IR35 compliance.
Many of you who have been contracting for a number of years will already be aware of and understand the concept & impact of IR35. However for those that have never Contracted before you may want and need further information.
IR35 was introduced as new legislation as part of the Finance Act 1999, and has obviously had an impact on the contracting sector and those working within it, throughout 1999 to date.
Up until April 2000 there had been little confusion, contractors operated through either umbrella or limited companies. In doing so they were free to manage their income themselves, normally with the assistance of an accountant. You will know, if you have been contracting for a while that historically this included, very low salary levels being drawn alongside expenses monthly, with a balance usually paid as a dividend. Dividends were taken rather than salary as they do not attract National Insurance deductions, and they also allowed income to be passed to other individuals (normally people on low income such as working/non working spouses).
From 1999 the Inland Revenue effectively caught up with this so called abuse of the tax system and introduced IR35. This has changed the basis of taxation for contractors trading through ‘service companies’.
It is reasonable to assume that contractors could still draw income in the manner detailed above, however this is only so if they can prove that the engagements, can be regarded as a form of ‘self employment’.
MGCS specialises in providing accountancy services for contractors and temporary workers in a wide range of professions.
|IR35 contract reviews
and contractor tax
We are not Solicitors and cannot give legal opinions on your contracts we do...
As a contractor, your needs are unique to you and your industry. We have built up a niche market in...
Switch to our mobile site
Questions? We're here to help. Send us your questions now...