What is IR35, and what can you do about it?

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  • Опубликовано: 10 сен 2024

Комментарии • 119

  • @lucyoliver3057
    @lucyoliver3057 3 года назад +54

    This is the first thing I've watched/read about IR35 that actually makes sense. Thank you

    • @chill3525
      @chill3525 Год назад

      guy is straight to the point and explains it really well. Very helpful, need more content like this.

    • @Nathan_Heaps-Page
      @Nathan_Heaps-Page Год назад

      Agreed

  • @newoap
    @newoap 3 года назад +19

    Precise and easy to understand.
    Great video.
    Can you do one about umbrella companies, deemed payment and the other working schemes if your contact is inside IR35?

  • @rudy346
    @rudy346 3 года назад +5

    Thank you for this clear explanation. I've been watching IR35 related videos for about 1h30 and this the first one that makes sense to me! Sub'd!

  • @Justtellmetheanswer6910
    @Justtellmetheanswer6910 3 года назад +8

    Hi Daniel. Just want to thank you for making an incredibly clear video on this subject. I studied law a long time ago and I struggle with this topic.
    Lastly, I would like you to know that you were always a hero of mine whilst at law school. I even spoke to you once on LBC and you once even helped me indirectly with an exam. Hence why I wanted to say thank you very much for being and amazing barrister and role model.

  • @russbramley1270
    @russbramley1270 2 года назад +1

    Always wondered what exactly IR35 entailed especially with me looking to step into contracting and this really clued me up, thank you for the information!

  • @richardheasman
    @richardheasman 3 года назад +3

    The CEST tool does not adequately determine your status as it does not incorporate case law... a major issue which is very difficult to resolve using tick boxes!

  • @brianforbes4417
    @brianforbes4417 3 года назад +6

    I do not fall into the ir35 trap, I work for multiple clients on job to job contract, Clients have outright stopped using Ltd contractors because of both the logistics and potential liability of ir35 so there is no alternative but to close my company, I completely understand why ir35 has been implemented but for genuine contractors, the way it has been implemented is the end of the road. Useless txxxe cxxxs

    • @macflod
      @macflod 3 года назад

      Yeah, i can see the problem, hopefully clients will calm down over all this stuff soon though and can spot a genuine contractor over an employee who changed how they work for tax advantages.
      The only plus i have is that my services can be in very high demand in summer so some clients are struggling to get work done when they rule ir35 as contractors have a choice of clients to work for and are avoiding these clients.

  • @hitherelondon
    @hitherelondon Год назад +1

    Can't thank you enough for making it plain and clear.

  • @TuxedoPanther
    @TuxedoPanther 2 месяца назад

    Great, many thanks, the best explanation I have found 👍

  • @keags111
    @keags111 2 года назад

    Wow, the most concise and clear IR35 video I’ve seen. Thank you!

  • @mikehannah1234
    @mikehannah1234 3 года назад +6

    Fantastic summary. Thank you Daniel.

  • @feizalglencross545
    @feizalglencross545 3 года назад +3

    Clear and concise,,,, excellent description.
    Thank you

  • @martinpercy5908
    @martinpercy5908 2 года назад

    So much better than the other YT videos I've seen about this THANK YOU

  • @coderider3022
    @coderider3022 Год назад

    Know people which just told me to pay the insurance and don’t worry about it and that they aren’t worth investigation and have very short lived contracts.

  • @SagarFilm
    @SagarFilm 2 года назад

    This was the cleanest and most informative video I found on IR35. Thank you for covering it in an honest way and provide people with help.

  • @britanniasecurityservices982
    @britanniasecurityservices982 Год назад

    Thankyou very much for taking the time to record this video. It is extremely useful and clear.

  • @tomfooleryalert5094
    @tomfooleryalert5094 3 года назад +23

    Thanks for the video. This is just another way for the govt to simply tax legitimate contractors!! Another reason to leave the UK for good.

  • @zoeobrien2083
    @zoeobrien2083 3 года назад +1

    This is do clear and well laid out, thank you so much Daniel.

  • @owenbaily3788
    @owenbaily3788 2 года назад

    Really good and concise video and you was able to explain IR35 in a way I could more easily attempt to understand it compared other peoples efforts, thank you

  • @barry-cq4xg
    @barry-cq4xg 3 года назад

    Nice to see that you now have a RUclips channel. I am a regular listener to your LBC slot.

  • @subairporora
    @subairporora 7 месяцев назад

    Super helpful. Most of the confusions cleared. Thanks much!

  • @thedrivebygg
    @thedrivebygg 2 года назад

    Daniel thank you so much for taking the time to clearly explain the requirements of IR35, really great video. To summarise... as long as the hiring client has less than 50 employees and turnover is less than £10.2 million per year and the balance sheet is less than £5.1 million IR35 is not enforceable. If the hiring client is not a UK company does that have any bearing, im guessing not?

  • @ninapavlovic4454
    @ninapavlovic4454 3 года назад +3

    Succinct summary - thanks!

  • @simonmackenzie4820
    @simonmackenzie4820 2 года назад

    Great summary, I actually understand it now. You made it all really simple which it is anyway just badly explained elsewhere. Thanks.

  • @mmalig8718
    @mmalig8718 6 месяцев назад

    Please make a video on the new IR35 offset thing and please expalin double taxation!

  • @jmcarlzon
    @jmcarlzon Год назад

    Super clear, thank you Daniel!

  • @helenpeckham4746
    @helenpeckham4746 3 года назад

    Great summary, really clear and concise in 10 minutes, brilliant thanks Daniel

  • @DaveCollins123
    @DaveCollins123 3 года назад +5

    Since these individuals will be taxed as employees, why will they not get full employment rights as employees then?

    • @DanielBarnettLaw
      @DanielBarnettLaw  3 года назад +1

      Because they've chosen to arrange their affairs to work through a limited company - meaning there is no contract between them (as an individual) and the end-client. And if there is no contract between them, there cannot be an employment contract between them. It's harsh, I know.

    • @DaveCollins123
      @DaveCollins123 3 года назад +4

      @@DanielBarnettLaw Thanks for your reply, Daniel. I understand the law, I was merely posing the question to highlight the injustice of the State taxing someone for one reason yet not giving them the concomitant benefits. If you can be classed as an employee on employment tests, then why can the ET not imply a contract to make you an employee? (Before I retrained as a lawyer I was an IT contractor and we were forced to operate via Ltd Coys....by the clients. They wanted to protect themselves....It was never actually our choice)

    • @MattFozz27
      @MattFozz27 3 года назад +3

      @Bigger Issues couldn't have put it any better

    • @MattFozz27
      @MattFozz27 3 года назад +1

      @Bigger Issues grubby and poorly run. It's an absolute joke right now. Along with trying to silence up by taking away our human rights. It's not looking good

  • @adailydaughter6196
    @adailydaughter6196 2 года назад

    So helpful. Thanks a lot. And just to confirm, great idea to have that call to action at 6:12 as I was busy making notes and could have forgotten. Will definitely share for all your hard work and generosity giving your time and expertise. Subscribed too 👍😊✨

  • @mariagracias14
    @mariagracias14 Год назад

    clear explanation and v good summary - thank you!

  • @loveblissman
    @loveblissman 2 года назад +2

    Firstly great video, it is pretty clear BUT there are a few crucial things left out.
    1) IR35 doesn't actually bring you inline with an employee because under IR35 you actually end being responsible for paying employee and employer tax and NIC. Which a normal employee wouldn't.
    2) Expenses - Technically it is possible if you had high daily expenses (maybe stayed in a high price area with high hotel) and had low daily rate to actually make little and even no money. Because the expenses would be taxed and paid out and this would come off of what was left. Clearly breaks the fundamental rule of business which is that tax is taken on profit !
    3) The other thing that many people do, is look at this as a purely money / tax situation. Sure there are tax benefits to certain ways of being paid but don't under estimate the simplicity of paying dividends or operating as a contractor. Simplicity saves money and time and potential breaches of rules. It would be worth operating a non-salary or at least low salary regardless of tax implications because of the ease with which the paperwork for these could be done. Also what if you want to build up a business history and story ! Being constantly or intermittently classified under IR35 prevents that.
    We have to see IR35 as what is really is ! It is technically tax fraud on behalf of the government. This has nothing to do with the money but is because you are operating in a way that does not represent the truth. You are using an umbrella company (in most cases I believe) to run your payroll who you never actually work for and you are paying employer tax and NIC. It is a situation which you are falsely put into in order to make HMRC more money. But they are HMRC they could simply put up the tax rate or introduce a new category for one person companies or increase corporation tax on companies with under a certain number of employees. I have no problem with them wanting more tax but you can't do that with a system that does not represent how you work. Plus you should have a choice to work under whatever business vehicle you choose, this should be a business decision and it should be up to government to change the rules and tax rate to ensure they still get what they need ! It basically makes no sense at all. Let people be contractors under limited companies and charge them more tax fine but they have to be able to charge their training, hotel bills and business development out of their earnings and they have to be able to create a client history !!
    Lastly the problem is there are contracts where the company does not even bother assessing the situation at all !
    Anyway pretty good video but the main thing that is left out is the real tax implications ! And the obscure arrangement that is put in place in most cases when an umbrella company processes the payroll (it is true you can in theory process your own payroll through your company but most public sector companies insist you use a third party).

  • @ZohoExpert
    @ZohoExpert 2 года назад

    Great video. Loved your ending with you pointing to the empty space for an update video. Very clear, I'll be using that on some of videos 😀
    Very clear video and great content. Subbed and liked!

  • @Professional_Youtube_Commenter
    @Professional_Youtube_Commenter 2 года назад

    businesses now just setup small umbrella companies which then engage the consultant's ltd company. the company is small and exempt from ir35.

  • @protrace2000
    @protrace2000 2 года назад

    Thank You

  • @Dosmo5
    @Dosmo5 3 года назад

    Great job. Easy to understand

  • @kubatacapoeiraantiga8455
    @kubatacapoeiraantiga8455 3 года назад

    There's better tools than the CEST which proven to be wrong even with the NHS.
    There are solutions, compliant solutions, that insure the tax liability for contractors and keep the chain free of problems. Especially good for all outside IR35. DM if you need to know more. Happy to assist.
    Great video though (as always) 👍🏼

  • @published1789
    @published1789 2 года назад

    Have you created any material that addresses being forced to work through an "inside IR35" model? No one in the finance sector seems to even be doing any assessments at all -- they just say "the client BANK/EXCHANGE/etc. have a policy that all contract staff must come via an Inside IR35 model ... here's our staffing partner and the 3 umbrella companies they use -- go sign on with one of them."

  • @AB3Design
    @AB3Design Год назад

    Thanks so much for this video!

  • @sophiaarthur2222
    @sophiaarthur2222 3 года назад

    Great video. Gave me a good understanding of IR35

  • @TonyErgonie
    @TonyErgonie 3 года назад +1

    If you work remotely for a company as an employee and get paid a gross monthly fee with the responsibility on you to pass the necessary tax and NIC deductions, what will happen in april?

  • @shazoids
    @shazoids 2 года назад +1

    Why don't we tax the rich, (non tax paying), consultancies who will seek to benefit from this legislation.

  • @tim_tucks
    @tim_tucks 2 года назад

    Very Helpful

  • @HRHooChicken
    @HRHooChicken Месяц назад

    what does IR stand for? and what does the 35 refer to?

  • @marchaywood9378
    @marchaywood9378 2 года назад +1

    Thank you Daniel, this has been super helpful summarising a topic I need to understand but frankly struggle to understand. I have recommended your clear, concise and lucid presentation summary to my network. One additional query I have, would you be able to point at the likely differential for a given day rate outside vs inside, for example like 17-25% to account for NI additional costs (fixed) and business expense costs that are not additional but may not be claimable inside IR35? (5-15%?)? Thanks, Marc

  • @davidadams421
    @davidadams421 3 года назад

    Outstanding.

  • @ClaUDiishmoO
    @ClaUDiishmoO 11 месяцев назад

    So if you are a freelancer or contractor your client should deem whether you are inside or outside IrR35 is that correct?

  • @zimcanit6647
    @zimcanit6647 Год назад

    thank you!

  • @winniedog2510
    @winniedog2510 3 года назад

    Excellent video. Thanks

  • @ugiagbe123
    @ugiagbe123 2 года назад

    Great content. Thank you

  • @meonitelexdee3432
    @meonitelexdee3432 2 года назад

    So then how an overseas contractor could work full time for a UK company (as a dependent contractor) without leaving their country?

  • @stefanogizzler
    @stefanogizzler 3 года назад +1

    Fantastic explanation Daniel! Bang on!

  • @ambeggingforwifi4797
    @ambeggingforwifi4797 3 года назад

    Cheers for the video makes morw sense

  • @lesbianalien3435
    @lesbianalien3435 3 года назад +2

    So with the government bounce back loans if I close my LTD company down because i can no longer trade because of working with agencies. And agencies will not accept LTD if this comes into affect. Will i not have to pay the loan back. Surely the government will lose alot

    • @chrisgee2283
      @chrisgee2283 3 года назад +1

      I won’t be paying mine back that’s for sure

    • @lesbianalien3435
      @lesbianalien3435 3 года назад +2

      @@chrisgee2283 me neither

    • @s559tja
      @s559tja 3 года назад

      Complaining about contractors having to pay more tax, yet happy to take out large loans from the govt with no intention of paying them back. You couldn't make it up

    • @lesbianalien3435
      @lesbianalien3435 3 года назад +2

      @@s559tja how can it be paid back if its not possible to trade?

  • @jacksoncrate
    @jacksoncrate 3 года назад

    Brilliant

  • @macflod
    @macflod 3 года назад

    Im doing a number of short contracts through the year- 2 to 4 weeks at a time for different clients. However the current client wouldn’t contract me and would only permit me to work on a short term employment contract. Other clients are putting pressure on me to take out ir35 insurance which i haven’t done as i believe i don’t fall under this ir35 category but also don’t see that im liable anyway, its the client that needs that.
    I really wish the rules were clearer on all this as clients seem terrified and no one knows whats going on.

  • @rafatsiddiqui7962
    @rafatsiddiqui7962 3 года назад

    I work as limited company part-time and have full time job which i pays tax and national insurance. At end my accountant work out how much tax i pay and national insurance he was do all my income tax calculations on my over all income.
    Is this change still affect me.

  • @raphaelsantanasouza
    @raphaelsantanasouza 3 года назад

    Excellent video, thank you! But I have a question: If a national UK company want to pay a Portuguese company to do some remote IT service inside this same UK company. What this means in terms of both sides?

  • @NabeelKhan-ci8gw
    @NabeelKhan-ci8gw Год назад

    like the gov don't make enough in taxes

  • @EgoShredder
    @EgoShredder 2 года назад

    7:18 - "Stay safe".......... from? Your government? If yes I agree, stay away from them as much as you can.

  • @bazeem85
    @bazeem85 3 года назад

    Question: if a person's ltd co have 6-10 employees and he is paying all taxes. If the director working as freelance manager will he be also in IR35?

  • @DavidSmith-ly3ww
    @DavidSmith-ly3ww 3 года назад +1

    Could you explain the situation for us as a Care Home using temporary staff through an agency, please? Do we have to subtract tax and NI from the invoices the Agency sends us and pay it to HMRC, or are they outside the scope of IR35 as these workers do not have their own limited companies? We control the work that is undertaken, where it is undertaken and how it is undertaken. Similarly, if a 'Temp' is not fitting in, we can immediately replace them with another from the Agency.

    • @wakeup8233
      @wakeup8233 3 года назад

      From what i am led to believe they will have to put you through an umbrella scheme to pay full tax and ni

  • @abdusshakur4751
    @abdusshakur4751 3 года назад

    Hi Daniel, very good explanation, I work for Uber London and other driving apps and get paid in to my small ltd company account. I decide when and where to work and uber gives us the holiday pay and some workers rights . Do u think I fall into ir35? Uber London didn't write anything about it to me yet thanks

  • @aturan-fo1qt
    @aturan-fo1qt Год назад

    Hi, what will happen after April 2023 for IR35?

  • @joehanson7070
    @joehanson7070 3 года назад

    What about if you are working as a sole trader under the cis scheme, as tax is taken at source. will the new ir35 legislation abolished the cis and force you to go employed under paye.

  • @stopgotdamndeletingmycomme8642
    @stopgotdamndeletingmycomme8642 3 года назад

    Id love u to do a vid about the vxx passport coming into effect in sep

  • @thomaswelch9147
    @thomaswelch9147 3 года назад +1

    In my opinion, this doesn't fairly represent the tax position.
    1. Dividends are taxed at 7.5% upto 37.5k, and 32.5% between 37.5k and 150k.
    2. Employers NICs is 13.8%. This isn't the contractors responsibility, its the hirer. You don't tell an employee that their gross is 13.8% higher.
    3. The collection of VAT generates tax at 20% on invoices. Whilst some businesses can claim this back, non VAT registered firms are generating tax for the revenue by engaging contractors.

  • @harveyaustin8952
    @harveyaustin8952 3 года назад

    Great video. Just to be sure, are you saying that if as a freelancer (contractor), if I work for a company that DOESN"T tick 2/3 of those boxes (Annual turnover is over £10.2m, Balance sheet total is over £5.1m, More than 50 employees), then IR35 doesn't apply? So if I am a freelance designer working for a small business or startup, then I don't need to worry about this?

  • @wakeup8233
    @wakeup8233 3 года назад

    This will stop small busineess contractors who go ltd because there end clients want them too and will make the availabilty of skilled good contractors not available on the market when big business needs them . Overall this will choke off quickly needed skills in sectors which are already lacking and loosing skills at an alarming rate !!!

    • @macflod
      @macflod 3 года назад

      I think that already happening in my industry- in summer there is high demand for services i provide as a contractor and the clients who are putting everything under ir 35 are struggling, the clients who are not are getting the contractors to provide them services last minute and as they need them.
      However i hope soon the hysteria around this will dissipate and they will be able to see a genuine contractor for being a genuine contractor. I hate being told a job is under ir35 when no one has asked me anything about my ltd co. As far as i can tell if i work for more than one client through the year i don’t fall under it so i am avoiding the jobs as they come along and i know im lucky to be able to do that.

  • @christopherrome4475
    @christopherrome4475 Год назад

    HELL MET MAN - Protesting against the UK's IR35 Regulations - RUclips

  • @imrulhossain596
    @imrulhossain596 2 года назад

    Can a Uber driver form a limited company and avoid IR35?

  • @damodongo
    @damodongo 3 года назад

    If I’m contracting for a small company does this still affect me?

    • @officialfosua
      @officialfosua 3 года назад

      It affects every single contractor

    • @KakaCat99
      @KakaCat99 3 года назад

      The determinatio IR35 is upto you..(as it currently stands). The responsibility after 5th April is for clients who are medium/large companies. See HMRC for what is small, med, large..

  • @chocksaway100
    @chocksaway100 Год назад

    Yes IR35 our unelected PM Sunak thinks this is a great idea all the while allowing his wife to avoid tax through NON DOM status.

  • @PotterSpurn1
    @PotterSpurn1 Год назад

    Whenever anyone writes about IR35, they always take a sympathetic view toward contractors caught by it. It is a very fair tax. If you run a limited company - setting yourself up as a business - it is only right that the benefits of paying yourself dividends are offset against the risks your business has to take.
    IT contractors are not in that position. They take no or few risks, so there is no reason why they should be classed as in business on their own account when they are little more than well paid temps working on one client site for set hours per day for a regular expected fee over several months, years even, and work under the supervision of a client manager.
    If contractors want the benefits of being employed they should get a job. If they want the benefits of being in business they need to generate some leads or put up a brass plate, and win multiple clients and invest in the company properly.
    What they actually want is their cake and eat it too: all the benefits and security of being employed and all the tax advantages of being in business. No can do.
    That was why IR35 was introduced.

  • @marcok5412
    @marcok5412 3 года назад +2

    Now I'm even poorer, great

  • @stinga_
    @stinga_ 3 года назад +1

    Well slavery meant to have been abolished long time ago.

    • @kata730211
      @kata730211 3 года назад

      Nobody free. People in the illusion they have “freedom”, and actually we are all slave and no way out I’m afraid unless you are rich like hell

  • @jamess3474
    @jamess3474 2 года назад

    Makes zero sense. The contractor needs to pay for everything, insurance, car, phone, internet, not getting paid for days off. You are a contractor.

  • @SMacCuUladh
    @SMacCuUladh Год назад

    So the Tories brought this in and people still think they're right wing?

  • @RahimRahim-cc7rl
    @RahimRahim-cc7rl 3 года назад

    like like

  • @daniellantos26
    @daniellantos26 3 года назад

    How bad is the NHS nobody should be forced to pay NI. I never used it in 9 years but I still pay for it. I see NI as a scam.

  • @qwertyu2387
    @qwertyu2387 3 года назад

    No more HGV drivers who are registered as Ltd, dogging the taxes. No more recruitment agencies looking for Ltd registered drivers. Personally I have seen people asking on Facebook for unwanted fuel, protective clothing, stationary receipts just to provide proof un-existing expenses. It's shame that government has been waiting so long for this to be implemented.

    • @steveweener
      @steveweener 3 года назад

      Na, the real shame is huge corporations get away with contributing naff all tax. But atleast it puts a stop to those pesky HGV drivers scraping together unwanted receipts and clothing though 👍

    • @qwertyu2387
      @qwertyu2387 3 года назад

      @@steveweener thief is thief !!! Doesn't matter if stealing millions or £250.

  • @Robcatist
    @Robcatist 3 года назад +1

    Times up for all those sole traders masquerading as a Ltd company paying themselves 12 grand a year then the rest in dividends tutt tutt well you’ve had a good run.

    • @tornado1598
      @tornado1598 3 года назад +14

      Yeah now they get to pay just as much tax as you without any of the benefits that you get like holiday pay, sick pay, travel allowance, company car. I mean it's not as if they hadn't paid a penny in tax is it? Now they get to pay for all you PAYE employees who have been Furloughed for months and "working" from home. Makes you feel all warm inside doesn't it

    • @andybennett3736
      @andybennett3736 3 года назад

      @@tornado1598 or they just get a full-time job

    • @dmnx600rr
      @dmnx600rr 3 года назад +1

      Are you jealous or just stupid?

    • @lindacopywriter684
      @lindacopywriter684 3 года назад

      Freelancers were forced to open limited companies by the hirer’s in order to take the jobs. 🙄