|
| CBSbutler commitment to our contractors |
Our driving objective is to find work for contractors and find suitable contractors for our clients. However we recognise that life is often not easy for freelance contractors, particularly when issues arise concerning how you operate, and tax issues such as IR35. Similarly it can be useful for contractors to be able to easily access relevant and helpful information without having to trawl through the plethora of offers and opportunities offered via the Internet.
We have always tried to help our contractors where we can. For example with the onset of IR35 we have provided a suitable contract template for those outside IR35 situations.
Lawspeed prepared the template, and we now use their latest cutting edge template (of course, IR35 involves more than simply having the right template). We have therefore tasked ourselves with finding a service provider who can really help us to help you.
In addition to providing industry tested templates, (now also approved by the PCG for use by PCG members – making it even more acceptable to Freelancers), Lawspeed now offers a unique Freelancer Advice Support service (FAST) to help with virtually every aspect of your business, short of doing your work for you!
We have not been able to find any other service provider that does this, and so CBSbutler is pleased to announce that it offers, in conjunction with Lawspeed, a new Freelancer Advice Support service.
|
| CBSbutler working in conjunction with Lawspeed |
Lawspeed’s FAST service is designed to help freelance contractors from start up onwards, by providing expert and objective advice on what genuinely helps a freelance contractor to operate, including operating outside IR35. It covers guidance on whether to set up your own company or operate through an umbrella, assists in putting together your work description through to full blown IR35 action points (if that is what you want) and gives all the support you need to safely operate as a freelance contractor.
Why have we chosen Lawspeed? Because, as legal and commercial specialists, they have the expertise and the right attitude that every freelance contractor needs. Lawspeed is a preferred supplier to the PCG and has been providing industry-tested and Revenue-tested contracts and advice since 1998. In our view, the proof of the pudding is in the eating, Lawspeed was responsible for drafting the clauses accepted by a Tax Commissioner in the only successful IR35 case yet (Lime-IT) and has a professional pedigree second to none. Its range of services is not limited purely to IR35, and includes a whole raft of commercial solutions that could benefit you for the whole of your business lifetime.
Over the years that Lawspeed has been helping freelancers, it has researched and developed a number of business contacts. We invite you to take advantage of this support for our mutual benefit for years to come.
CBSbutler therefore provides you with Lawspeed’s FAST Service giving access to:
+ Immediate impartial start-up guidance
+ Rapid advice dealing with your queries on our contractual terms FREE OF CHARGE
+ Legal and commercial support including company formation, IR35 and recommended services |
| Starting up in business - IR35 |
|
Historically, the vast majority of freelancers ran their own limited company, allowing them to draw much of their fees as dividends with significant tax advantages compared to any other method.
With the introduction of IR35 in April 2000 these tax advantages may have been removed depending on whether you fall within the scope of the IR35 legislation or not. As a general rule, if your engagement falls outside the scope of IR35 then you will be better off using your own limited company, whereas an umbrella company can be more beneficial if all your engagements fall within the scope of IR35, and there is no scope to restructure. The difference could be as much as 15-20% additional cash in your pocket.
Lawspeed will be able to advise on the appropriate method of contracting given your particular circumstances. They will also form a limited company for you very quickly, usually next working day. If you provide some basic figures they will be able to provide an approximate take-home pay comparison between ‘caught’ and ‘not caught’. |
| Queries about a particular term? |
The contract that we supply has been drafted by specialist contract suppliers and IR35 advisers – Lawspeed. Whilst we understand that the contract terms are not the sole determinant of IR35 status, the template has been prepared to reflect engagements that are operating outside IR35, where appropriate.
This is a cutting-edge contract and has been refined over many years to address typical IR35 and commercial requirements. In the unlikely event that you have any query about the provisions in this contract, the first port of call should be Lawspeed. Through this Contractor Support arrangement, they will deal with most queries free of charge, just call 01273 236236.
The Schedule is an important aspect of your contract
The terms and conditions are only one aspect of the contract itself, the specific Schedule wording is a crucial component that is often overlooked. The contract is drafted to reflect the performance of project-based services. From an IR35 perspective, it is therefore important to describe the project as specifically as possible. Drafting the Schedule incorrectly or ambiguously could prove very costly. |
| What is IR35? |
|
The so called “IR35” legislation is enacted in Schedule 12 Finance Act 2000 and the Social Security Contributions (Intermediaries) Regulations 2000. IR35 is the name of the press release issued by the Inland Revenue announcing the impending legislation in April 1999 and the name has been adopted as a generic name for the legislation ever since. Falling within the IR35 tax rules could reduce your income by around 15-20%, a freelance contractor earning £50 per hour would typically face an additional tax liability of around £12,000.
All the working arrangements are relevant. Of primary importance is the work and nature of the work, and the contracts that the company enters into serve as supporting evidence. If the engagement would have been one of employment if it were not for the existence of the intermediary, the tax is payable by the intermediary.
The test of liability is wholly legal and is a test based upon employment status case law. As such, in order to advise correctly it is essential to have a strong understanding of employment law and the principles involved. Those principles include a good grasp of contract law and the meaning of clauses as well as comprehension of the intention of the parties to the contract. Most accountants would not fall into this category.
We recommend that our freelance contractors seek proper objective advice before:
+ concluding that IR35 applies to their arrangements
+ entering into any dealings with the Inland Revenue on issues relating to IR35 |
