If you provide your services to a company through an intermediary then you need to consider whether the IR35 Off Payroll Working legislation applies to you.
What’s an intermediary?
An intermediary can be a worker’s own limited company (usually know as a personal service company or PSC), a partnership or another individual.
There are too many situations to list out here what this actually means, but realistically if a limited company, another subcontractor, an agency or partnership is charging another company for the use of your time and skills then this is something you need to consider.
How do I know if it applies?
Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:
• they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profit
• they can decide what work they do and when, where or how to do it
• they can hire someone else to do the work
• they’re responsible for fixing any unsatisfactory work in their own time
• their employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finish
• they use their own money to buy business assets, cover running costs, and provide tools and equipment for their work
• they can work for more than one client
These things can be more difficult to assess when providing services through an intermediary but they give you a good basis to start with.
What’s the cost to me?
If you find that you can’t meet enough of these criteria then it’s likely you would be considered an employee.
This means that you will have to pay tax and national insurance on your earnings as if you were an employee, which obviously sort of negates the benefits of being self employed in the first place.
The good news though is that each of your contracts will be assessed on a contract by contract basis, meaning that some of them may fall out of the scope of IR35.
The be all and end all
IR35 can be complicated and if you are not sure then HMRC actually have a handy check service which will give you an idea (https://www.gov.uk/guidance/check-employment-status-for-tax).
Your accountant should be able to give you some advice as well and remember if it’s a public service contract then make sure you seek some advice as this area is even more complex now!