Freelance & IR35

[freelancenewbie]

Hi - new to freelancing - just been offered a fab opportunity but I'm wondering if it may be caught by IR35 - I'm hoping not as I don't want to be an employee. May have to go to accountant but thought I'd ask here first. Details: If I accept the offer, I will be offering my specialist skills, via my newly formed company, one day a week to a company based 200 miles away. I'll be working from home, my laptop, my mobile phone, Skype etc. Any time off will be set by me (for which I won't be paid) - i.e. no set paid holiday entitlement etc. Have agreed a daily rate with them. I will invoice them (via my company) at end of each month for 4 days' work (one day a week). Any additional work they ask me to do, I'll charge an hourly rate and add it to my monthly invoice. The reason I think it may be IR35 is because they won't be assigning me specific projects - more a case of they'll throw all sorts at me one day a week and I'll just get on with it. What do you think - any advice/opinions. Thanks for time. Am I being overly analytical?

IR35 is a minefield. You would be wise to talk to an accountant who has experience in the field. But if your earnings are going to be below the NIC thresholds or close to them then its not really going to be a big issue I wouldn't have thought either way as essentially its to avoid paying NIC's when you're really in all but name an employee.

How are you planning to take money out of your service company?

If you are an employee of your own company, which is paying you a salary and paying any necessary NICs then it isn't much of an issue. It's mostly about trying to avoid being taxed like an employee by taking money out via dividends.

Hi, thanks for your replies, I think I need to relax. My daily rate is low and probably under the threshold (I'm still really pleased with it though!) so maybe it's a non-issue. Thanks!

TAx allowance for 13/14 is £9,205 pa most people would pay themselves up to that amount as an employee (ie around £767 per month) - not much NI and assuming you have no other income tax free. UNless you're earning over this it won;t be a problem.

NI at £767 per month is £14 per month

Mainly make sure they do not control when you work or where you work and who else you work for
then you should be OK as its then not disguised employment