Finances for Freelancers
Bob Smith, head of finance at Stage Electrics, expands on the IR35 and how valuable it is for you to know more.
What is IR35?
Whilst lots of people have heard of IR35 not everyone knows what it is.
For those of you who don't know, IR35 is a piece of guidance from HMRC setting out their definition of what makes someone "self-employed". It is important to remember that the Inland Revenue wants everyone to be employed because they will pay more tax & NI and it will be less work for HMRC to collect.
If challenged by The Revenue, don't be afraid to stand your ground - HMRC don't make the rules, they merely enforce them and when robustly challenged they will often back down.
Of course the best way to make sure you will win is to have a good contract in place between yourself and the company to which you are contracting, such as the one Stage Electrics has for all its freelancers. This is there to protect your employment status in the event of a challenge from The Revenue.