If you are a UK business working as an intermediary in the private sector, you may or may not be aware of the off-payroll working rules you have to adhere to. These are commonly known as the HMRC IR35 rules.
If you are the person providing the services, whether as a sole trader or a limited company, you will need to decide which rules apply to you. Whilst the rules are fairly complex and we certainly recommend you seek professional advice, there are some steps you can take to ensure you can demonstrate you are truly self employed and able to avoid the IR35 rules.
To ensure you can demonstrate that the end client (the person or firm you are doing a task for) does not have a right of control over the task you do, you may want to consider the following:
- Demonstrate your business is independent and that you are doing or able to do work for other end clients at the same time.
- Have substitutes and helpers available to ensure the work is done if you are unavailable for any reason. If this happens, you should pay the substitute or helper as an expense to your own business and the end client should still pay you as originally agreed
- Ensure you issue invoices for the gross amount of the work that you do. Include VAT if you are VAT registered.
- Regularly track your businesses finances and profit. Keep aside a sufficient amount to pay your taxes.
- If you are a project manager contractor, ensure your accounting software allows you to manage income and expenses on a ‘per project’ basis. Having such information recorded may be used to help demonstrate being separated from the client company.
And if you want to find an accountant to help you use Reckon One, visit our directory and search for an accountant in your area who can help you out.