Q. I work in a sector where I am paid weekly, with an NT tax code and therefore treated as self-employed for tax purposes, and following an update of the NI regulations in April 2014 I no longer pay NI at source either. I can engage a substitute and do rather frequently. Do you think it unlikely that IR35 would apply to this if I started trading as a Ltd?
A. If you were to operate through a limited company, the fact you can and do engage a substitute will certainly stand you in good stead. The issue of personal service and substitution is one of the key factors in IR35 and demonstrating that you are able to send a replacement would go a long way to proving the legislation didn’t apply.
Obviously we don’t have any details of your current tax position; the NT coding means you pay no tax on your income. Naturally if you did operate via a limited company you would have tax and national insurance to pay – both as an employer and personally as a director.
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