As we edge ever closer to the IR35 April 2021 changes, one question which many of our clients are asking their accountant is, ‘should I refuse IR35 contracts?’ In this blog we explore the different circumstances that could ultimately make you decide to reject a contract, and why it’s advised to run your decision past your Aardvark accountant first.
Every case is unique
Does the contract make professional and / or financial sense? Every contract will be different, and so we advise taking a look at your personal circumstances to decide whether the contract will add value to you. For example, if you’re experiencing a dry-spell and the income (even at a reduced amount compared to what you’re used to) is much needed, or a particular contract could open more professional doors in the future, then taking the contract could outweigh the negatives of being ‘inside IR35’.
What does Aardvark advise?
Always speak to your Aardvark accountant before you make your final decision. Even though the responsibility of determining your IR35 status is no longer under your control, you may still be able to work with your client to increase your chances of having an ‘outside’ IR35 status, and your accountant will be able to advise you on this.
But before doing so, make sure you’re sure that your contract is outside of IR35. Get your Aardvark accountant to review your contract, and use HMRC’s CEST tool (Check Employment Status for Tax).
What’s involved in an IR35 review?
Your Aardvark accountant will review your contract, working practices, and terms of employment. Should those three factors be more aligned to those of employment rather than a Limited Company contractor, then your contract could suggest you working inside IR35.
When determining your status, the following three areas will be taken into consideration:
Control: What’s the level of direct control and supervision you’re subject to from the end-hirer / client?
Supervision: Are you able to send another contractor in your place, to complete the contract? If so this would suggest your working practices are outside IR35.
Mutuality of Obligation: Does your client / end-hirer expect you to complete additional work outside of your agreed contract? If the answer is ‘yes’ then this suggests your contract is inside IR35.
What can Aardvark Accounting do to help?
If your client places you inside IR35, or your contract does following a review, your Aardvark accountant will suggest a number of things you can change from within your contract or working practices, and support you in communicating those changes to your end-hirer / client.
If your client still determines your status as inside, we will support you in an appeal, and/or you’ll be able to switch over to SG Umbrella completely free of charge, should you decide to complete the contract using an Umbrella company. Then should your status change or when you take on a new contract, we’ll simply switch you back to Aardvark Accounting and your Limited Company.
IR35 can be a minefield, especially when the final decision is taken out of your hands and ultimately has an effect on your overall take home pay. Your Aardvark accountant is a specialist in IR35, and is there to offer you tailored expert advice and support, whenever you need it. Contact them today to ask them anything about your personal circumstances, and your contracting career post April 2021.
Note: All the information and advice in this blog post was correct at the time of writing.