Q. I am a director of a limited company. I am the only employee. I have had 3 month contracts which have been renewed for the same company for the same role. My most recent contract, uncharacteristically for 6 months this time, will take me over 2 years. Will This cause me problems with IR35? I have asked my accountancy firm, but they declined to give advice.
A. Length of engagement with the same end client should not cause you an IR35 problem, provided that some or all of the main tests of employment status rest in your favour, ie right of control, lack of personal service (inc. right of substitution), an absence of mutuality of obligation (MOO), financial risk and business on own account. Of course there are other tests to take into account but these tend to be less significant than these five.
Where a contractor works for an end client for a significant length of time, then HMRC try to argue that it is more likely that the contractor is subject to the control of the end user which is why it is important to demonstrate this is not the case. It is most likely that MOO will be a feature of a lengthy engagement, so this may have to be conceded but then again HMRC don’t like to argue this test anyhow.
If you have been working at the same end client site for the last 2 years then it is important that you stop claiming travel & subsistence expenses from the date the 6 month contract started, as this is the contract that takes you past 24 months & its start date would have been the time you would have known that the workplace was to become a permanent workplace by virtue of the 24 month rule.
As contractor fro years in the public sector I am inquiring about the new rule to take NI/Tax at source from 2017
I am about to start a contract that does not seem to factor in pension or holiday/sick pay in how the daily rate is calculated ? or so the agency told me
If we have to pay tax at source and be treated as an employee from 2017 will we then receive sick pay/ holiday pay & pension contributions as an employee