{"id":7068,"date":"2021-04-15T12:28:34","date_gmt":"2021-04-15T12:28:34","guid":{"rendered":"https:\/\/coolcompanydev.staging.wpengine.com\/uk\/?post_type=blog&#038;p=7068"},"modified":"2023-06-29T13:14:39","modified_gmt":"2023-06-29T13:14:39","slug":"to-be-captured-or-to-not-be-captured-how-would-you-know","status":"publish","type":"blog","link":"https:\/\/coolcompany.com\/uk\/blog\/to-be-captured-or-to-not-be-captured-how-would-you-know\/","title":{"rendered":"To be captured or to not be captured, how would you know?"},"content":{"rendered":"\n<section class=\"wp-block-coolcompany-section has-light-blue-background-color has-background has-light-blue-background-color has-background\">\n<div class=\"wp-block-columns are-vertically-aligned-center is-style-right-image is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\"><div class=\"breadcrumbs align  wp-block-bcn-breadcrumb-trail has-text-color has-background\" vocab=\"https:\/\/schema.org\/\" typeof=\"BreadcrumbList\">\n\t<span><\/span>\n\t<\/div>\n\n\n\n<h1 class=\"wp-block-heading\" id=\"h-inside-or-outside-ir35-how-to-determine-your-status\">Inside or outside IR35 \u2013 How to determine your status?<\/h1>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-vertically-aligned-center is-layout-flow wp-block-column-is-layout-flow\">\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/coolcompany.com\/uk\/wp-content\/uploads\/sites\/3\/2022\/02\/frilansare-med-skisser.png\" alt=\"\" class=\"wp-image-8104\" srcset=\"https:\/\/coolcompany.com\/uk\/wp-content\/uploads\/sites\/3\/2022\/02\/frilansare-med-skisser.png 890w, https:\/\/coolcompany.com\/uk\/wp-content\/uploads\/sites\/3\/2022\/02\/frilansare-med-skisser-300x222.png 300w, https:\/\/coolcompany.com\/uk\/wp-content\/uploads\/sites\/3\/2022\/02\/frilansare-med-skisser-768x568.png 768w, https:\/\/coolcompany.com\/uk\/wp-content\/uploads\/sites\/3\/2022\/02\/frilansare-med-skisser-480x355.png 480w\" sizes=\"(max-width: 890px) 100vw, 890px\" \/><\/figure>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n<div class=\"wp-block-coolcompany-separator is-style-default has-violet-10-background-color has-background\"><svg width=\"100%\" viewbox=\"0 0 1600 60\" fill=\"none\" xmlns=\"https:\/\/www.w3.org\/2000\/svg\" role=\"img\" aria-hidden=\"true\"><path fill=\"#ffffff\" d=\"M0 0L29.6667 1.75612C59.5 3.36587 118.833 6.87807 178 12C237.167 17.122 296.167 23.8537 355.333 22.6829C414.5 21.5122 473.833 12.1464 533.333 9.07319C592.833 5.85368 652.167 8.78051 711.333 11.2683C770.5 13.6098 829.5 15.6585 888.667 18.7317C947.833 21.9512 1007.17 26.3415 1066.67 27.8049C1126.17 29.2683 1185.5 27.8049 1244.67 23.7073C1303.83 19.4634 1362.83 12.7317 1422 8.34148C1481.17 3.95124 1540.5 1.90246 1570.33 1.02441L1600 0V60H1570.33C1540.5 60 1481.17 60 1422 60C1362.83 60 1303.83 60 1244.67 60C1185.5 60 1126.17 60 1066.67 60C1007.17 60 947.833 60 888.667 60C829.5 60 770.5 60 711.333 60C652.167 60 592.833 60 533.333 60C473.833 60 414.5 60 355.333 60C296.167 60 237.167 60 178 60C118.833 60 59.5 60 29.6667 60H0V0Z\"><\/path><\/svg><\/div>\n\n\n\n<section class=\"wp-block-coolcompany-section\">\n<div class=\"wp-block-columns is-style-columns1 is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-vertically-aligned-top is-layout-flow wp-block-column-is-layout-flow\">\n<p>If you work as a contractor, the phrase &#8220;captured by IR35&#8221; might strike fear into your core! All the information you can find about IR35 suggests that you find out if you are inside or outside IR35. But not much of it will tell you in plain terms if you are caught by IR35 and how to work it out. In this article I will explain, from a contractor&#8217;s point of view, the key things you need to understand about what determines IR35 status and whether you are captured by this legislation and why it means so much.<\/p>\n\n\n\n<p>Hopefully, you have an idea of what IR35 legislation means. If not, I recommend reading our <a href=\"https:\/\/coolcompany.com\/uk\/ir35\/\">IR35 guide<\/a> before continuing with this article. Let&#8217;s remember that the fundamental reason for IR35 was to ensure the tax compliance within the flexible workforce and to ensure that HMRC and the Treasury receive the correct amount of tax from everyone. The PAYE model does this very well, but contractors manage their own tax returns, and people make errors or intentionally try to defraud the system.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Who is responsible for determining IR35 status?<\/h2>\n\n\n\n<p>The client has been responsible for the IR35 status determination since April 2021. However, as a contractor, it\u2019s wise to understand whether you\u2019re caught by IR35 or not, regardless of the client&#8217;s decision. Contractors who want to operate through their own business must be genuinely self-employed, and this is what IR35 measures, \u201cAre you a disguised employee?\u201d. So how do you know, as a contractor, if you are inside or outside IR35?<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What determines IR35 status \u2013 4 key things to understand:<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">1 \u2013 Does a permanent employee do the same job?<\/h3>\n\n\n\n<p>This sounds like an odd question to ask, but does the person next to you or someone in the company perform the same tasks and duties as you, just as a permanent employee? If the answer is yes, it\u2019s not 100 % certain whether you are caught by IR35 or not. But the question seeks to understand if your skills are required on a project basis or if your skills are actually a permanent requirement.<\/p>\n\n\n\n<p>If a permanent employee does the same job as a contractor, the role should be a permanent one, and if this is true then HMRC would see your role as caught by IR35. The contractor&#8217;s justification may be that the requirement is a short assignment with no guarantee of work afterwards. But if you have been with the client for an extended period of time and worked on several projects under the original contract, it might be worth discussing this with the client.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">2 \u2013 How is the contractor&#8217;s work managed?<\/h3>\n\n\n\n<p>The idea of a client hiring a contractor is to hire them to fill a skills gap, a gap where they don&#8217;t have the skills and knowledge internally, and they don\u2019t have specific instructions on how to do the work. Now, this doesn&#8217;t mean they cannot manage the contractor, meaning checking progress, meeting milestones and providing project updates are all fine. But if the daily routine is for the client to provide a list of tasks to be completed and then advise how the contractor will complete the tasks, the role may fall within IR35. If your contractor assignment sounds like this, you may need to be concerned about your status as a contractor to avoid being caught by IR35.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">3 \u2013 What does the contract say?<\/h3>\n\n\n\n<p>When it comes to contract terms, we tend to rely on generally accepted terms, so we rarely read the terms and conditions carefully. It\u2019s by far easier to tick the little box. And hey if it\u2019s not legal then it doesn\u2019t count right? But as a limited company contractor, you have to know what\u2019s in the contract and what determines IR35 status. Ignoring these things could be the first stumble on a very long road to a tax penalty.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">4 \u2013 Do you take advantage of the benefits offered by the employer?<\/h3>\n\n\n\n<p>We all like the benefits an employer offers, but unfortunately not all of us should be able to get them. Employee benefits are just for employees, and if you, as a contractor, get an invitation to a Christmas party, use of the company car or discounted meals in the canteen, you may question your IR35 status. As a contractor, you should not accept any of the benefits provided to employees to ensure you are not caught by IR35.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Find out when IR35 applies<\/h2>\n\n\n\n<p>And this is how you determine when does IR35 apply \u2013 Take a look over your current assignment and compare yourself to the points above. These questions will give you a good idea of whether or not you are within IR35. There are of course many other elements you can take into account, but if you follow the explanations above, you have a good chance at being a contractor and not a disguised employee.<\/p>\n<\/div>\n<\/div>\n<\/section>\n\n\n\n<div class=\"wp-block-coolcompany-separator is-style-has-shadow\"><svg width=\"100%\" viewBox=\"0 0 1600 60\" fill=\"none\" xmlns=\"https:\/\/www.w3.org\/2000\/svg\" aria-hidden=\"true\"><path fill=\"rgb(238,246,253)\" d=\"M0 0L29.6667 1.75612C59.5 3.36587 118.833 6.87807 178 12C237.167 17.122 296.167 23.8537 355.333 22.6829C414.5 21.5122 473.833 12.1464 533.333 9.07319C592.833 5.85368 652.167 8.78051 711.333 11.2683C770.5 13.6098 829.5 15.6585 888.667 18.7317C947.833 21.9512 1007.17 26.3415 1066.67 27.8049C1126.17 29.2683 1185.5 27.8049 1244.67 23.7073C1303.83 19.4634 1362.83 12.7317 1422 8.34148C1481.17 3.95124 1540.5 1.90246 1570.33 1.02441L1600 0V60H1570.33C1540.5 60 1481.17 60 1422 60C1362.83 60 1303.83 60 1244.67 60C1185.5 60 1126.17 60 1066.67 60C1007.17 60 947.833 60 888.667 60C829.5 60 770.5 60 711.333 60C652.167 60 592.833 60 533.333 60C473.833 60 414.5 60 355.333 60C296.167 60 237.167 60 178 60C118.833 60 59.5 60 29.6667 60H0V0Z\"><\/path><\/svg><\/div>\n\n\n\n<section class=\"wp-block-coolcompany-section is-style-no-space has-violet-10-background-color has-background has-violet-10-background-color has-background\">\n<h2 class=\"wp-block-heading has-text-align-center\" id=\"h-do-you-want-to-know-more\">Do you want to know more?<\/h2>\n\n\n\n<p class=\"has-text-align-center\">Do you have any questions or are you ready to get started with Cool Company? <\/p>\n\n\n\n<div class=\"wp-block-buttons is-horizontal is-content-justification-center is-layout-flex wp-container-core-buttons-is-layout-499968f5 wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button is-style-primary\"><a class=\"wp-block-button__link has-blue-background-color has-background wp-element-button\" href=\"https:\/\/freelance.coolcompany.com\/signup\/password\">Sign up<\/a><\/div>\n\n\n\n<div class=\"wp-block-button is-style-primary\"><a class=\"wp-block-button__link has-blue-background-color has-background wp-element-button\" href=\"https:\/\/coolcompany.com\/uk\/why-choose-cool-company\/\">Read more<\/a><\/div>\n<\/div>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>We provide you with four simple things to help you understand if you are captured by the IR35 when the new legislation arrives.<\/p>\n","protected":false},"featured_media":5664,"template":"singular.php","categories":[6465,6759],"tags":[6753,6773],"class_list":["post-7068","blog","type-blog","status-publish","has-post-thumbnail","hentry","category-cc-insights","category-ir35","tag-blog","tag-ir35"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.2 (Yoast SEO v27.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How to determine IR35 status | Cool Company UK<\/title>\n<meta name=\"description\" content=\"As a contractor, are you unsure whether you are caught by IR35? Cool Company guides you on how to determine IR35 status and when does IR35 apply. \u2192\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coolcompany.com\/uk\/blog\/to-be-captured-or-to-not-be-captured-how-would-you-know\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"To be captured or to not be captured, how would you know?\" \/>\n<meta property=\"og:description\" content=\"As a contractor, are you unsure whether you are caught by IR35? 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