IR35 affects all contract staff that do not meet HMRC’s terms of ‘self-employment’. IR35 regulations can lead to increased tax and national insurance payments that can have significant impacts upon a company’s profitability.
Any contract staff that are classified as coming under the IR35 rules will come under the banner of Schedule E taxation and National Insurance. Expenses are exempt and are not included under the terms of the regulation. Also, there is a provision for other such expenditure at the rate of 5% of turnover.
Other items of expenditure that can be claimed outside those included within the 5% allowance include those below:
- Pension payments
- Business travel
- Professional Indemnity cover
- Benefits in kind
Knowing who in your team may or may not be included within the rules of IR35 can be a tricky affair unless you have expert knowledge of the rules. At Dyer & Co, we can help ensure that all your contract staff are accounted for correctly. As with all our key services, we are always available to discuss your concerns so please get in touch if you need any advice.