Class Series
Locating A Top Class IR35 Company Discussed In Very Basic Terms
Do you need an IR35 company (or employment management company as they are often referred to) and, if so, how do you go about locating a top class IR35 Company?
The first part of the question is relatively easy to answer; IR35 became effectual from 6 April 2000. The legislation was intended to deal with "disguised employees"; persons that the government thought were reaping the benefit of a corporate structure when they actually should have been taxed just like any other employee.
The rules actually only relate to "relevant engagements" - when a person provides services to a client through an intermediary, such as a limited company, and, but for the existence of the intermediary, the income would be treated as that of an employee if the individual had contracted directly with the client.
The purpose of the legislation is that, notwithstanding specific deductions, all money received by the intermediary in respect of relevant engagements should be treated as paid to the individual in a form subject to Schedule E income tax and class 1 NI. In effect, dividend payments and many business expenses are not allowed.
If you have any doubts as to whether or not you do need a top class IR35 Company then there are many chartered accountants that can advise you.
Now – the best way to go about locating a top class IR35 Company would be much the same as one would source any important asset to the company, be it stock or staff. If you have a current accountant that you are happy with then they would be the first port of call, see if they have any recommendations. Then one should approach your suppliers, other contractors that you do and have worked with as well as any people that you have done work for. I personal recommendation is often worth more than a simple Yellow Pages cold call.
However – if you still draw a blank then the Internet or the Yellow Pages would be the next point. Make a short list and interview them just as you would any employee, after all, you will be working together for some time.
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