The IR35 legislation was designed to enable HMRC to determine through a series of questions, whether a temporary worker is deemed to be an employee of the client due to the nature of the working relationship or not. This has historically proved a very difficult piece of legislation to enforce. However, you can be fully assured that if you are being paid through the Zeva Umbrella Company the basis of your engagement is already one of employment, with all your income paid as a mixture of salary and allowable expenses.

In other words, if all your earnings are through Zeva, all your PAYE and NIC is paid according to HMRC rules, therefore you will minimise the chance that you have an additional tax bill to pay, or have to prove your employment status.

The Basics of IR35

IR35 was introduced to prevent freelancers and contractors from taking income from their limited companies through small salaries and large dividends. This approach would provide significant tax benefits and the IR35 tax rule was introduced as part of the Finance Act 2000. In short the IR35 rules would ensure that contractors are taxed in the same way as regular PAYE workers.

IR35 Ruling

IR35 rules apply to cetain types of employed and self employed individuals. HRMC makes the decision as to whether IR35 applies to you.

Individuals who perform services for a business owned by another person are likely to be subject to IR35 rules. Freelancers would fall under this umbrella.

If you have your own business premises or work from home then you are likely to be considered as self employed. HRMC will look at many factors here to make a decision.

Contact Rules & IR35

IR35 rules are applied to a contract rather than a individual person. Most contractors will have more than one contract on the go and not all of these contracts will fall under IR35 rules. It is important to note that its a contractors responsibility to check whether they fall under IR35 rules. They will also need to make sure they ay the correct taxes.