IR35 Advice

24/12/2025

🎄 Christmas opening hours - IR35 Tax Advice

We’ll be taking a short break over Christmas. Our opening times over the festive period are:

• Tuesday 23 December: Open
• 24 December - 1 January: Closed
• Friday 2 January: Back to normal

We’ll be checking emails periodically for anything critical, but access will be reduced and phone lines won’t be monitored.

For anything urgent, please email [email protected].

Have a great Christmas break 🎄

23/05/2025

IR35 is confusing. Ask 10 people and you’ll get 11 opinions.

So we’re cutting through the noise with Ask an Accountant — a short weekly Q&A answering one real contractor or freelancer tax query.

No waffle. No lectures. Just honest answers from specialist accountants who know the contractor space inside out.

🧠 Ask an Accountant - No Jargon. No Pressure. Just Answers.

Got a tax question that’s been bugging you?
Now’s your chance to ask one question - completely free of charge.
No sales pitch. No pressure. Just straight answers from accountants who get it.

Whether it’s about:
- Living or investing abroad 🌍
- Buying, selling or renting property 🏡
- IR35 or off-payroll working 💼
- Crypto, side hustles or capital gains 📊
- Life as a freelancer or creative 🎭

Pop your question in the comments or drop us a DM. We’ll answer publicly (anonymously if you prefer) in a future post and down in the comments.

Because tax shouldn’t be confusing - and you shouldn’t have to pay just to get started.

12/05/2025

Should a contractor take a role as director of their client company - basically no, but covered this in the short video attached

In this video, Mark Barrett addresses a crucial but often overlooked issue: can contractors become directors of client companies without falling foul of IR35...

01/05/2025

Excellent summary from (c) Dave Chaplin below (and I always love his graphics which is also copied here ), well worth a read but remember, specific advice on your exact circumstances and the contract review (as assessment that you haven't laid an implied contract on top of the written version) is essential.

If we can help, reach out to us - [email protected]

Folks, after 4.5 years since the last update to CEST in Nov 2019, HMRC have made some cosmetic changes and updated their CEST User Manual (ESM11000).

If you have already reviewed CEST and concluded it's not for you - you don't need to reconsider, because nothing has materially changed.

As HMRC have stated: "There is no change to underlying technical principles." This is curious, given HMRC based it's tool on it's view of status in Nov 2019, yet key submissions it made at the Court of Appeal in Atholl House and the Supreme Court in PGMOL failed. (I have copies of all documents in the Atholl case, having worked on it for 6 years.)

The now-settled case law speaks to the two phased way both mutuality and control needs to be dealt with, in conjunction with the contract, against the backdrop of the admissable factual-matrix.

HMRC have republished the underlying CEST Logic here:
https://lnkd.in/gmERHtDQ. Beware, the new s/sheet format is a doozy.

So, what to learn? Well, the clues are in the guidance. But, first, you need to understand that CEST will only give an "Outside IR35" decision if either of the single-factor pre-conditions (see Atholl) for personal service and control are met. Because, if you don't, then HMRC will only give "Outside IR35" in extremely narrow cases, which most hourly/daily paid contractors will never satisfy. You can find this out for yourself by navigating the logic s/sheet.

So, bearing in mind there are certain choices of answers to unlock the "Outside IR35" door, the guidance is now designed to make you never chose the right combination.

Whilst I'm largely in agreement with the HMRC guidance on substitution, it's puzzling why HMRC have not updated their tool to align with it. Bear in mind, that behind the scenes, in case work, HMRC are aggressively challenging substitution claims.

For control, I partially agree with some of the very basic guidance, which effectively says "don't chose answers W, X, Y or Z" - which would lead to "Outside IR35". Again, why not just update the test to align with the new principles that emerged from the Supreme Court in September 2024? FYI, the new principles on control set the initial pre-condition control bar very low, making any reliance on a control pre-condition trigger very risky indeed - unless your contractor is simply selling widgets. Again, behind the scenes in case work, HMRC are aggressively challenging claims of no control.

And what happens with CEST if you follow HMRC guidance on sub' and control? You end up being told "Inside IR35" or "Dunno" (Indeterminate).

Finally... when HMRC come and check your compliance, what is one of the first questions they ask? "Have you used CEST?" Given the above, why would you chose to play that game?

Best of luck everyone.

14/03/2025

Wow, the taxman has racked in a huge amount of tax … from you

Changes to IR35 off-payroll working rules affected 120,000 contractors and raised an additional £4.2bn in tax in just four years from income tax, National Insurance contributions (NICs), and apprenticeship levy payments.

As a result of the 2021 reforms, which were designed to reduce the use of IR35 and force companies to hire contracts on the payroll, less personal service companies were set up, with HMRC estimating that there were 45,000 fewer new PSCs between April 2021 and March 2022 than what was predicted based on previous trends.

In total HMRC estimated 280,000 individuals moved from being paid through PSCs between October 2019 and March 2022, including those who transferred across to PAYE employee status.

Our specialist team can advice you and your contractors on your IR35 position, contact us now.

02/02/2025

What does umbrella company clampdown mean?

In a long-awaited crackdown on fraudulent activity prevalent in the umbrella company market, the chancellor announced at the Budget last October that legislation was on its way from April 2026 to tackle non compliance across the sector. The news was welcomed by many employment businesses, accrediting organisations and other stakeholders at the time.

But now that legislation is on the table, will it fix the sector?

What legislation is coming?

Despite repeated calls for regulation, legislation has been a long time coming. In 2022, the previous government ran a call for evidence on the umbrella company market, followed by a consultation in the summer of 2023.

In April 2024, in its Tax administration and maintenance summary, Sunak’s government mooted a ‘due diligence requirement to drive out bad actors from labour supply chains’, following further engagement with the sector.

Finally, in Chancellor Rachel Reeves’ maiden Budget, she announced that legislation was on its way, from April 2026.

Legislation will involve the transfer of responsibility to account for PAYE and other tax deductions from the umbrella companies that employ the workers to the recruitment agencies that supply the workers to an end client, and the agencies will be liable for any shortfall. If a business is not using an agency, the responsibility will sit with this end client business.

The government’s rationale for this approach is because recruitment agencies can control which businesses enter their labour supply chains and so, by extension, can prevent illegitimate operators from entering the market.

Making these recruitment firms legally responsible for ensuring that PAYE and other tax deductions are properly accounted for is expected to tighten due diligence and ongoing monitoring practices around engaging umbrella companies and thereby improve compliance.

Will it make a difference?

There are limitations to the government’s chosen route to regulation. A major flaw is that most recruitment agencies already carry out thorough due diligence as standard practice when choosing to work with a third-party supplier, particularly one that will handle the payroll function.

Understanding and monitoring the supply chain has long been a key pillar of government guidance.

However, recruiters are not accountants or extensively trained in detecting fraud. Many of the umbrella schemes in operation are highly sophisticated and difficult to identify, which is what makes them so effective.

Even with substantial guidance and support from government resources, recruitment specialists are by trade not experts in financial conduct or governance. Driving sector-wide compliance in this way will be a challenging task.

It's why firms like us at Tax Advice work so closely with the end client and recruiters - if we can help you, contact us and we'll have a no-obligation chat.

edited from a great article from (c) Croner

22/01/2025

Bryan Robson wins majority of IR35 Tax Case against HMRC

Bryan Robson partially won the IR35 tax appeal against HMRC, highlighting that complex tax laws urgently need reform.

Former England Footballer Bryan Robson has won the majority of his appeal to the First-tier Tax Tribunal for services provided to Manchester United Football Club as a Global Ambassador from 2015/16 to 2020/21 via his company, Bryan Robson Limited.

The case concerned the IR35 legislation and whether Robson was working as a deemed employee for Manchester United.

Robson appealed all six tax years, of which the first four years and 8 months were fully allowed, leaving 16 months from 03 December 2019 to 06 April 2021, during which a proportion of his earnings should have been treated as deemed employment. The tribunal has directed the parties to agree and set aside part of his earnings, which constitute fees for image rights, and, for the rest, decide on the quantum of the extra tax due under the IR35 rules.

Excellent article from (c) Contractor

13/01/2025

Inside IR35 worker wins £36k for wrongly deducted ER NICs

An inside IR35 worker at the Home Office has won her employment tribunal case after employer national insurance was "unlawfully" deducted from her gross pay, which could have big implications for the umbrella industry and recruitment companies.

This case concerns a very common practice of deducting the employer national insurance contributions (ER NIC) from the fee before it is given to the individual providing the services.

In this case [ET 2302929] the client, the Home Office, engaged a social worker, Michelle Appiah, through a recruitment company Tripod Partners Ltd.

Inside IR35 contractor
Appiah worked through a PSC as an ‘inside IR35’ contractor. The Home Office paid Tripod gross who then paid Appiah after deductions. What is crucial in this judgment is that Tripod assumed the phrase 'employment taxes’ covered ER NICs. The tribunal disagreed and held that the deductions were unlawful and Tripod was ordered to pay Appiah £36,826.65 and a small amount for the apprenticeship levy.

The claimant first worked through an umbrella company but then set up a PSC and worked for the Home Office through Tripod. The Home Office carried out an assessment and used CEST to determine that Appiah fell within IR35 so tax should be deducted on an inside IR35 basis. Appiah accepted that she fell within IR35.

(c) Rebecca Seeley Harris

If you're a contractor, wither working through an umbrella or your PSC and want professional advice, reach out to us

13/01/2025

Love the simple explanation in this short video ... yep, it's all about the contract, which is the written contract, and the implied contract if you do not behave in accordance with the written version.

If you need active support with your contracts, reach out to at IR35 Advice

https://www.facebook.com/reel/278584902011627?mibextid=rS40aB7S9Ucbxw6v

13/11/2024

Employee or Worker or Contractor

The government introduced the concept of Worker an age ago and it’s ramifications for is growing all the time.

The latest case involves those working under the app for taxi drivers. A tribunal has ruled that Bolt drivers can be classified as which means the taxi hailing app will have to pay national minimum wage and holiday pay

The decision will have ramifications for up to 10,000 private hire drivers, who are part of a wider claim being represented by one law firm, and will no doubt influence the government’s review of the use of contract workers.

Bolt drivers currently work under contracts which classify them as self-employed independent , which they dispute as the work they do is akin to worker status, not gig workers. At the tribunal, the drivers argued that they were ‘employed’ by a Bolt company as ‘workers’ whenever they undertake a driving assignment and for so long as they make themselves available to do so, and are therefore entitled to be paid the national minimum wage and to receive paid annual leave and certain other benefits.

Bolt contended that the ‘Bolt Link’ scheme, which enabled any registered driver to have other drivers operating under their Bolt account, meant that the element of personal service essential to ‘worker’ status was negated.

The tribunal ruling stated: ‘We find that the supposed contract between the Bolt driver and the passenger is a fiction designed by Bolt (and in particular its lawyers) to defeat the argument that it has an employer/worker relationship with the driver.

‘The device is necessary since, without it, the inevitable inference is that such a relationship exists and explains the dealings between the parties.’

Employment Judge Elson rejected Bolt’s arguments on the principal and agency model, saying these reasons did not negate any driver’s obligation of personal service, and did not have any bearing on the proper legal analysis of the ‘worker’ status issue.

The tribunal concluded that in the cases of the six sample claimants that a ‘worker’ contract came into existence when the driver met the following conditions: they were in the territory in which they were licensed to operate and had the Bolt App switched on.

The crux of this reasoning was based on the general analysis in Uber BV v Aslam, namely that, where and for so long as a ‘worker’ contract exists (i.e., the requisite mutuality of obligation is established), the driver is ‘working’ under a ‘worker’ contract, when they are (a) is in the territory for which they are licensed, (b) has the app switched on and (c) is ready and able to accept trips.

However, Judge Elson stressed that ‘we have not made the mistake of treating analysis of the agency model as a simple repeat of Uber…this is not Uber. There are material differences between Uber’s system and Bolt’s. We have applied our minds strictly to the evidence put before us in these proceedings. Second, we have already acknowledged that the so-called ‘gig economy’ has moved on since the Uber litigation’.

For the purposes of Working Time Regulations 1998, reg 2(1), the tribunal ruled that national minimum wage should be paid to drivers for periods ‘during which he is working, at his employer’s disposal and carrying out his activity or duties’ and is engaged in ‘unmeasured work’. This would include ‘availability time’ when the driver is signed into the app between jobs, excluding drivers who use multiple apps.

The six Bolt claimants were represented by Leigh Day employment, and the law firm is handling the wider claim. Leigh Day is also representing Addison Lee and Ola drivers in two parallel claims.

If you engage contractors or are a contractor yourself, and want professional IR35 advice, contact us by emailing [email protected]

29/10/2024

Worried about the Budget 😟

Let’s remove the worries, and replace it with facts, clearly presented and discussed.

All business owners are likely to be affected by the Budget being presented tomorrow, so the detail will be important to you - at 4pm tomorrow, we'll be presenting a live, free of charge webinar giving our initial insights into changes ... and there'll be a Q&A session ❓

If you want to hear how the Budget affects you and your business, join us by following the link to the webinar in the first comment. Look forward to seeing you then.