Contractors 'must establish' IR35 implications

Posted on 13 August 2008

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Contractors receiving conflicting advice over how IR35 legislation impacts upon their business activities should not simply move between reviewers in search of the response they desire, it has been claimed.

According to Kate Cottrell, founder of IR35 advisory Bauer & Cottrell, this is likely to be an unnecessary expense for contractors, reports Contractor UK.

She states: "If the reasons for the opinion are properly explained, supported with reasonable interpretation of up to date case law precedent and the reviewers track record of defending cases is good then it is probably not worth paying again.

"It has to be remembered that IR35 is about the relationship between the individual and the client and we are looking at a hypothetical contract so it is vital that this relationship is reflected in all the contracts in the chain."

Ms Cottrell advise contractors to decide if it is at all possible for income to fall outside the jurisdiction of IR35, operating through an umbrella company if necessary.

A number of risk assessment measures may be advisable, including tax investigation insurance, she adds.

IR35 legislation was introduced to avoid the elimination of tax obligations for contractors working through an intermediary.

 

Category: Tax & Legislation News

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