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IR35 - FAQ for Freelancers

What are the payment options, and what does that mean to me?

LTD, Umbrella companies (we only work with FCSA regulated companies) and PAYE.
www.fcsa.org.uk/members/

 

What if I don’t agree with an inside determination?

You have the right to appeal to the client. We suggest that you provide evidence to support why you believe you are outside IR35. The client has 45 days to respond with a final decision.

 

Can I opt only to be contacted about bookings that fall outside IR35? 

Yes you can. As this is a new thing for our industry, we are not sure how clients will respond. As such, we can’t guarantee we will still be able to offer you the same volume of bookings, if you choose only to work outside of IR35.

 

How will I know if a client is a small business?

A small business must tick two of the following boxes:

  • Annual turnover of £10.2 million or less
  • Balance sheet of £5.1 million or less
  • Fewer than 50 employees
  • If a client is a small business, the liability for deciding IR35 status remains with the freelancer

 

What if I fall inside IR35 and employer’s NI needs to be paid?

AND - If the client has a set budget which is not enough and is only able to increase by a minimum to cover some of the NI, does that mean I am in a position to make a decision on whether I drop my day rate so they can afford the increase in employer’s NI? Does that mean I am paying the NI increase, not the client and is that legal?

Ideally, the client will have set a budget based on them absorbing the cost of employer’s NI. On some occasions, they may ask to share this additional cost with the freelancers.

 

I have 3 choices – LTD, Umbrella or PAYE via Profiles Creative. What is the most cost effective for me between PAYE / PC and Umbrella? 

If you are deemed to be outside IR35, you can choose any option and nothing changes. If you are deemed to be inside IR35, we are then responsible for ensuring tax and national insurance deductions are made at source.

While we are very good at recruiting for the creative industries, we are not tax specialists! So, we can give an illustration of pay for each option based on your usual rate and suggest some Umbrella Companies you can contact. We do recommend you research each option thoroughly before making a decision as each will have its own benefits!

 

I am a LTD business is it okay to swap between Umbrella and LTD?

Yes! Some of our freelancers are using an Umbrella Company for inside IR35 assignments, and their LTD companies for outside assignments. 

 

I’ve had a result that the assignment falls inside IR35. Can you (the recruiter) help me to go through the questions and make sure I have understood and answered correctly?

We can definitely help you to understand what each question means. It will be up to you to decide which answer is correct and applicable to your assignment. It is really important that your working conditions match the answers you have given in the assessment, as this is what HMRC will look at if they ever investigate.

 

If you have a question which isn’t covered here, please send it to us at IR35@profilescreative.com and we will come back to you with an answer!

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