Consultants beware of IR35 – use the QDOS Model Contract (Free)

IR35 came into existance in 1999,  it was created to prevent workers previously employed from creating a limited company and then benefiting from lower taxes and national insurance through the use of dividends and expenses.

HMRC believed that it would generate £220 million a year in National Insurance Contributions and £80 million in Income Tax, but it has actually only generated around £1.5 million a year and HMRC have brought a number of cases before the courts, the latest being MBF Design Services Ltd v Revenue and Customs (2011) and ECR Conculting Ltd v Revenue and Customs, the taxpayer was successful in both cases.

I was reading an article in Accounting Practice about the MBF Design case and HMRC assisted a Foreign Airbus UK employee to prepare his statement but apparently because the employee struggled to read the statement or be examined on it the tribunal were unconvinced.

I have always found QDOS to be an invaluable source of help in the field of IR35 and you can download free guides and contracts using this link

http://www.qdosconsulting.com/freelancer-contractor/free-guides-templates

steve@bicknells.net