IR35 CONTRACTOR AND FREELANCER GUIDANCE

IR35 is tax legislation designed to tax deemed or disguised employment as PAYE income. Disguised employment means the relationship of the contractor (e.g. you ) and end-client is one of employment and the personal service company or intermediary as it’s popularly called, is part of an arrangement which results in a tax advantage to the contractor.

If the relationship is one of disguised employment, HMRC can tax income of personal service companies as PAYE. HMRC wants to make sure that no one gets an unfair advantage by using an intermediary. Therefore, if the relationship is not one of employment, then the contract falls outside IR35; and if the relationship is one of employment, then the contract falls within IR35.

IR35 Test Terms and Conditions

The IR35 test has been created based on specialist opinion. DNS has ensured the mechanics used for the test are true as far as the case laws are concerned but cannot ignore the fact that IR35 status for any contractor cannot be accurately determined until the contractual obligations have been fulfilled or challenged by HMRC.

Although this test helps you understand your position in terms of IR35, DNS Accountants cannot be held liable whatsoever for any decisions you make as a result of using the tool.

Take IR35 Test

I have read and agree to the IR35 Test Terms and Conditions

1. Substitution

1.1 Do you have the right to send a substitute on your behalf ?
Yes
No
Don't Know

1.2 If a real situation arises where you cannot service the client for whatever reason, would your client accept another contractor that you send to work in your place ?
Yes
No
Don't Know

1.3 Have you ever sent another contractor to work on the project on your behalf and the client allowed them to do so ?
Yes
No

2. Control

2.1 The manner in which services are performed is determined by you, rather than your client instructing you how to complete your work ?
Yes
No
Don't Know

2.2 Does your client move you between projects throughout the course of your contract based on their work needs ?
Yes
No

2.3 Have you ever refused to complete work requested by your client because it was not specified in your original contract ?
Yes
No

3. Mutuality of Obligation (MOO)

3.1 What is the notice period your client is required to give you for terminating the contract ?
No notice period
less than 7 days
2 weeks
4 weeks or more

3.2 What notice period are you required to give for terminating the contract ?
No notice period
less than 7 days
2 weeks
4 weeks or more
Cannot terminate

3.3 Is the client obliged to offer you other work which you would you feel obliged to take on after completion of your current contract ?
Yes
No

3.4 Does your contract include any clauses that restrict you from performing paid work from another client during the contract ?
Yes
No

4. Business Factors

4.1 In the event that errors have been discovered in work you have completed, are you expected to correct these errors without charging additional fees ?
Yes
No

4.2 Are you required to provide your own equipment ?
Yes
No
Don't Know

4.3 Do you have a company website, business cards, telephone, and separate premise from home or client place ?
Yes
No

4.4 Has your business got any additional sources of revenue other than your contract ?
Yes
No

4.5 Is it specified in your agreement that the intention is not to create a contract of employment but a client-supplier relationship ?
Yes
No

*Please answer all the questions before submitting the form

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Phone: 03300 886 686
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