Common IR35 Errors - Part 1

As all contractors are no doubt fully aware, IR35 and the notion of the ‘disguised employee’ can be an elusive and confusing topic. With the additional abundance of scaremongering and fabrication available online on this already bewildering topic, we see it fit that people are put straight once and for all.

In an attempt to quash and demystify some of the most common IR35 delusions, we have compiled some examples of the most common IR35 errors.

Keep your eyes peeled, for each week we shall be publishing a very common IR35 misconception, and righting the wrongs.

  1. “I have worked with the same client for over two years, so I must be caught by IR35.”

A surprisingly common misconception here, and one that occurs once too often as a result of confusion made with regards to the ‘24 month rule’. In this case, the ’24 month rule’ should not be a cause of concern as it is in fact in relation to claiming journey travelling expenses and has no association with IR35.

This IR35 error is common and not without reason however, as in the eyes of the Revenue, the longer a contractor has worked for a client, the more likely they are to be associated with the client’s company, therefore being deemed as a disguised employee. This being said, there are no set limits to this notion, and if a contractor continues to operate in a compliant working manner, they can technically work for a client for as long as they like without running the risk of any IR35 danger.

Regarding IR35, the main focus point of HMRC is the contract itself, and because of this the length of a contract would affect the potential liability if caught inside the legislation’s boundaries. As a result, it is of course advised to have shorter, more dispersed contracts, but despite this, it should not stop someone from remaining in the same position if their contract remains compliant for both parties involved.

By:Troy Stevens

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