Barry was exceptionally professional and very clear in his communication. His interaction was always amiable and engaging, making the whole experience very pleasant.
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Not sure about your IR35 status?
We have assisted over 25,000 contractors …and we can help you too.
IR35 is a set of tax regulations in the UK aimed at identifying individuals who work as self-employed contractors or through their own limited company but operate more like permanent employees.
The regulations apply to contractors, freelancers, and consultants. The key factor in determining employment status according to IR35, is whether the contractor’s relationship with the client resembles that of an employee-employer relationship.
Navigating IR35 regulations can be a complex task for UK contractors. We’re here to help you determine whether your contract falls inside or outside IR35 and provide the guidance you need to stay compliant. We’ll walk you through the following steps together.
- Review the nature of your engagement: Start by examining the working relationship between you and the client.
- Assess your level of supervision, direction, and control: Consider the extent to which the client dictates the way you work.
- Examine your right of substitution: Evaluate whether you have the freedom to provide a substitute to perform the work on your behalf.
- Evaluate your financial risk: Look at the financial aspects of your engagement. Contractors typically bear financial risk by quoting for work, invoicing clients, and assuming responsibility for project delays.
- Consider other factors: It’s essential to assess additional factors such as whether you are part and parcel of the client’s organisation, have integration with their employees, or have a fixed working pattern.
Structuring your contracts and working arrangements appropriately can go a long way to working within or outside of IR35 regulations. Here are some essential tips to help you navigate the complexities and ensure compliance.
- Clear Contractual Agreements: Make sure your contracts include clear language that reflects the self-employed nature of your working relationship.
- Emphasise Control and Autonomy: Highlight any elements in your working arrangement that demonstrate your control and autonomy over how you perform your tasks.
- Right to Provide Substitutes: Include provisions in your contract that clearly state your right to provide a substitute to carry out the work on your behalf.
- Financial Risk and Responsibility: Include clauses in your contract that demonstrate your financial risk and responsibility as a contractor.
These are general guidelines, and each case is unique. It’s crucial to seek professional advice to ensure your contracts are properly structured to comply with IR35.
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What Our Customers Say
Mike is very efficient in solving a problem that may or arises.Very prompt in communicating back to the client.Would highly recommend clients to work with him.
Josh responded immediately, and was easy to talk to, he also explained things in a way I could understand, and then he kept me well informed.
Mike was very professional, courteous, and friendly. He listened to my queries patiently, and he provided detailed explanations of all key topics.
Michael was very professional and provided me with all the information I required. He was also very helpful and articulate and the entire process went very smoothly.
Very friendly and approachable. Explained the process clearly and answered all questions I had with excellent knowledge of the system.
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FAQs
An umbrella company is a PAYE payroll administration company that acts as the employer for contractors who work on an assignment basis.
As an employee, you have full entitlement to state benefits like Statutory Sick Pay, Statutory Maternity Pay and a State Pension. The umbrella company acts as your employer and so can provide a continuous record of employment which can assist with loan and mortgage applications.
We only recommend trusted Umbrella Companies. We thoroughly research all the Umbrella companies on our site to ensure that they are compliant with HMRC guidelines and provide excellent customer service.
Compare the Umbrella only use Contractor reviewed and Agency approved umbrella companies. Here are the top things to look for when comparing companies: Weekly Fees, Insurance Cover, Customer Service, & Contractor Reviews.
The Umbrella Company processes PAYE payroll as your employer.
Pay As You Earn, or PAYE, is the taxation system used by HMRC to collect Income Tax and National Insurance Contributions (NICs) from employees. The amount deducted will depend on your earnings and the tax code you are on.
This means that as a PAYE employee of an umbrella company, you won’t need to submit any kind of tax self-assessment. You will be paying your tax and National Insurance contributions as you go.
Your PAYE payslip will itemise every incoming amount and outgoing deduction. Additions including, pay from your contract, claimed expenses, holiday pay, and sick pay claimed. Deductions including income tax, national insurance contributions, umbrella company fees, and pension contributions.
As a contractor working under an umbrella company, you are entitled to claim certain allowable expenses. The expenses must be directly related to your work assignment and approved by your Agency/Client.
This is one of the major benefits of being a contractor rather than being permanently employed. Submit your expenses along with your timesheets and the umbrella company will manage all the necessary administration for you. Your expenses will be offset against your taxable income for that week/month, therefore saving you money on your tax deductions, increasing your take-home pay.
