What is IR35 and why is it important?

If you're a contractor working through a personal service company then you need to be aware of the off-payroll rules (known as 'IR35') as they could have a big impact on how you get paid and how much tax and NI you have to pay.

We've got a range of articles, as well as an IR35 calculator to see if you're at risk and a jargon-free guide that explains all you need to know. We can also help with IR35 reviews of your contracts.

    What is IR35?

    IR35 is a tax law introduced to combat tax avoidance by workers supplying their services to clients via an 'intermediary' (such as a limited company) who would otherwise be an employee.

    • Why is IR35 important?

      It's important you establish whether your contracts are affected by IR35 rules. HMRC can investigate your arrangements at any time, and this can be time consuming, costly and highly stressful. The financial impact of IR35 can be significant. You may find your future earnings are reduced and even have to pay Income Tax and NICs retrospectively.

    • What does IR35 mean?

      If IR35 applies to your contract, it means you pay the same Income Tax and National Insurance contributions (NICs) as you would if employed directly, rather than contracted to work through your limited company. HMRC can go back up to six years and evaluate past contracts to see if the legislation should have applied.

    • Who determines your IR35 status?

      Following changes introduced by HMRC on 6th April 2017, responsibility for determining your IR35 status depends on whether you work in the Public Sector or the Private Sector. Find out more about the different process for each sector.

    • How can Crunch help?

      To assess your own risk, try the Crunch IR35 calculator. However, please be aware that the results of this test are only to be used as a guide. After you've completed the IR35 calculator, get in touch with your Crunch Client Manager and let them know the results so we can advise you on what to do next. If your score was in the medium or high risk category, we strongly advise you take action as soon as possible.

    • Get an IR35 Review

      Crunch offer a range of contract review services. An expert will review your contract, help determine your IR35 status more accurately, and will assist in helping you to comply with the government's regulations in this area. They can also offer advice on recommended changes to the contract to ensure you aren't incorrectly classified.

    • IR35 Guide

      We've pulled together all the information you need to know into our new IR35 Business Guide. Our business guides are jargon-free explanations of key topics for freelancers, contractors and small businesses. You can download our guides for free by joining Crunch Chorus - our free community for the self-employed.

      Get your free IR35 Business Guide

    IR35 explained

    Watch our three minute video to learn the basics of IR35, who it affects and what to do if you're concerned about it.

    Related articles

    Supervision Direction or Control

    If you work through a personal service company, you may not be able to claim tax relief on travel and subsistence expenses. For those still unsure whether they're affected, you can use the Supervision, Direction, and Control (SDC) test to get a clearer picture.

    Read this article →

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    Interested in our IR35 service?

    If you're a Crunch client already then please speak with your client manager. If not then call us on 0333 920 4791 or complete the form to find out more about how we can help you with IR35.

    We offer the following IR35 services:

    • IR35 Contract Review - £59.50 + VAT
    • IR35 Enhanced Contract Review - £129.50 + VAT
    • Express IR35 Enhanced Contract Review - £249.50 + VAT