What is IR35 and what does it mean to you?
The term IR35 is a piece of UK tax legislation introduced to the U.K. to attack the tax practices of "disguised employment" - ie: to prevent workers from setting up limited companies via which they would work effectively as employees, but save on tax.
The introduction of IR35 has meant that the Inland Revenue has the statutory power to look through the contractual arrangement between the Contractor and the end Client and assess a hypothetical contract.However, the legislation has also had a dramatic effect on the knowledge based industry where an IT Contractor could be deemed to be "employed" by the end client or agency - even if they are clearly self employed!
The Tax Advantage will arrange for a rigorous review of your contract to ensure that the contractor IR35 status is correct and that the contract reflects the Contractor/Client relationship accurately.
Your payments are open to the Inland Revenue and are clearly represented on your annual self-assessment return. We estimate that the total cost of your independent advantage (including National Insurance and income tax) is between 12-14% of your gross annual salary.
This means you will retain 86%-88% of the contract value.
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