Hello everyone! As a creative freelancer operating through a Limited company, I am looking for info on I35 legislation.
I found the following information: “After the switchover on 6 April 2021, it will be the client’s responsibility, instead of the PSC freelancer’s, to prove IR35 compliance.”
A freelancer operating via PSC “Personal Services Company” is pretty much everyone working as a freelancer through a Limited company who has 5% or more ownership – so apparently the client buying services from a PSC (freelancer) has to prove IR35 compliance.
What does it mean?
As a freelancer, before issuing invoice for the services provided, should I require to the client to provide I35 compliance document?
Any help will be much appreciated!
Thanks,
A
Replies5
- This is going to be a big topic for years to come. HMRC have said small companies don't have to adhere to IR35 rules, but most small companies deal with large companies and they force their terms down the chain. If done correctly then freelancers should be okay to trade as a LTD company. There are some certain criteria, such as managing your own time, being allowed to sub you as an individual in for someone else but you can test it on the gov checklist https://www.gov.uk/guidance/check-employment-status-for-taxTo note - it often gives me an "undetermined" response, which really isn't useful! If you think you're avoiding tax by earning dividends instead of paying tax like a self-employed sole trader then this is why the law exists. If you're running a LTD company to protect your business and clients then you'll be able to find a way of engaging in contracts that are fit for purpose.
- @Andrea PigaExactly. But the new ruling was controversal because the HRMC solution was a bit of a blanket policy that could potentially, drag companies like yours & mine into the requirement. I still haven't had any further advice from my accountant to share unfortunately.
- Hey @Matt Richards many thanks for your note !Yes, as a story artist like you I work 90% remotely - so from what you wrote, the whole I35 issue does apply more to contractors who performe work with continuity with the samer client on site?
- @Matt Richards For context my work is 99% studio based so working on site for a client never happens in my business. I noticed you are a storyboard artist - do you tend to work in-house? If so IR35 will definately be more of a consideration. I'll follow this thread with some interest as it's something I haven't looked at since they delayed the roll-out beforee COVID-19. Good luck!
- This is a messy one that has gone backwards and forwards for a few years now. Essentially trying to target contractors who are effectively working "full time" with the same company therefore should really be paying full employment tax.I'd suggest getting professional advice (accountant) on it. But here are the "basics" but not sure they will help your request too much?https://www.gov.uk/guidance/april-2020-changes-to-off-payroll-working-for-intermediaries
You must sign up or log in before you
add a comment.