![]() |
Contractor Tax Protection
Tax Liability Cover (TLC35) and IR35 insurance from Qdos Consulting |
As there is a significant financial cost for contractors caught by the IR35 rules, you should always get an IR35 opinion on your contracts. This guide also includes a select list of companies who provide IR35 contract review and drafting services.
Cost of IR35
A limited company contractor who is unaffected by the IR35 rules would typically withdraw a small salary, with most of his income being derived from company dividends.
If a contractor falls within the IR35 net, the income from any given contract will be significantly lower, as his income will be in the form of a deemed payment together with a small 5% allowance to cover the cost of running a company.
For this reason, it is in your best interests to ensure your contracts are not caught by IR35.
IT contracts and working practices
The recent landmark Dragonfly Consultancy IR35 case showed not only that the working practices of the contractor involved did not reflect the wording of his contract, but also that the two contracts in the case (one between the agency and client, the other between the agency and the contractor) did not mirror each other.
In order to escape the IR35 rules, you must make sure that both your contracts show that you are a 'self employed' contractor, rather than merely a 'disguised employee' of the client.
Naturally, you must also ensure that the terms of the contracts reflect the true reality of your contract working practices.
The Dragonfly case shows how there is no point having an 'IR35 proof' contract if the way you actually perform the role indicates that your working practices are more akin to those of an 'employee'.
IR35 Contract Review Tips
- You should make sure that an expert reviews your contract before you sign it. It will be very difficult to amend a contract once you have started work.
- Although most agencies are IR35-aware, some may be unwilling to amend terms in their contracts if they are required. This illustrates why it is essential to use professionals to handle to negotiations on your behalf.
- The IR35 rules apply to individual contracts, rather than a person. A contractor may have one contract which is caught by IR35, and others which are not.
- You can also have your past contracts reviewed to see if HMRC can claim back taxes from you by virtue of your previous contracts falling within the IR35 rules.
- The Dragonfly case shows how, more than ever, you must ensure that the terms contained in your contracts actually match the reality of your working situation.
- If you have several contract renewals, it is worth having your contract reviewed even if you don't change client, to ensure that the terms of the contracts still reflect your working practices.
- Always use a respected IR35 contract review specialist.
IR35 contract review services
Here is a select list of organisations / companies we admire who provide IR35 contract review services.
Bauer & Cottrell - Employment status / IR35 tax advisors. Everything from contract drafting and reviews, to full defence service in the event of an IR35 investigation.
egos - Legal consultancy. Provides IR35 opinions, drafting of direct contracts, confirmation of arrangements (making sure the contract reflects reality), creating agency contracts, etc.
| Our Partners |
|
Parasol PAYE umbrella Award winning service |
|
Contractor Accountants Full Service, Fixed Fee! |
|
Free Umbrella Company Save over £1400 p.a. |
|
ClearSky Accounting From £95 per month |
|
Fixed Fee Accounting Contractor Specialists |
|
Umbrella4Contractors Low fees, same day setup |
|
Free IR35 / Tax Review Call ICS - 0800 195 3750 |
|
Umbrella Co. Solutions Only £19.95 per week |
|
PRINCE2, MSP & M_o_R Maven Training |
| Contractor Insurance |
|
Hiscox Office Insurance Instant Online Quote |
|
IR35 Insurance Essential Protection |
|
Income Protection If you're unable to work |

| Contractor Services |
|
Compare Insurance Deals PI & Business Liability |
|
Contractor Ltd Company Instant online formation |
|
IT Contractor Pensions The last great tax break |
|
Private Medical Insurance Tailored contractor cover |
|
IT Contractor Mortgages Based on hourly rates! |
|
Protect Your Income Get a PHI quote |
|
IT Contractor Life Cover Protect your dependants |
|
Critical Illness Cover Comprehensive cover |
| IT Contractor Guides |
|
Contractor Umbrella Umbrella Co. Guides |
|
Credit Crunch Contractors Recession survival tips |
|
IT Contract Rates Contractor rate guides |
|
IR35 Factors Are you compliant? |
|
What is IR35? Guide to the tax rules |
|
Contractor Expenses What can you claim? |
|
IT Contractor Mortgages Sound mortgage advice |
|
Contractor Insurance Are you covered? |
|
Contractor Banking Choose a bank account |
|
Contractor Life Cover Contractor protection |
|
IR35 Insurance Tax investigation cover |
|
Contractor PI Insurance IT contractor cover |
|
Umbrella Companies Links to key providers |
|
IR35 Compliance Is your contract caught? |
|
Conservatives IR35 The Tory IR35 view |
|
Tories IR35 Conservatives IR35 |
Stay up to date with our RSS feed | Terms of Use | About Us | Directory | Site Map | MSC Legislation | Income Shifting
Copyright © 2006-9, Contract Eye Limited, All Rights Reserved.
UK Contractor Guides, Contractor Accountants, Umbrella Companies, IR35, Insurance, Contractor Mortgages
Design by Blue Egg Web Agency