![\"freelancer\"](\"https:\/\/zegal.com\/wp-content\/uploads\/2021\/06\/pexels-vlada-karpovich-4050296-1280x853.jpg\")
<\/p>\n<\/p>\n
If you’re a freelancer in the UK, you’ll be needing to understand whether you fall under the scope of the new IR35 regulations or not. Here is a detailed IR35 Guide for Freelancers.<\/p>\n
A good place to start is to check out why the government has put the new regulations in place. As of April 6, 2021, IR35<\/a> came into action to help stop ‘disguised employees’. In a nutshell, the gig economy has created plenty of workers that enjoy all the benefits and perks of an employee but are classified as self-employed, and HMRC wants it to stop.<\/p>\n IR35 rules now apply to \u2018medium or large\u2019 sized businesses in the private sector and all organizations in the public sector. There\u2019s an exemption for \u2018small businesses.<\/p>\n The government has put out a toolkit<\/a> to help you determine your status. However, this is not as clear-cut as it sounds and you’ll need to examine your client contracts to ascertain if you fall inside or outside IR35 as a freelancer.<\/p>\n Confusingly, freelancers are no longer responsible for assessing their project’s IR35 status. It’s now the end client that is responsible for determining whether an assignment is inside or outside of IR35 rules. However, it’s in your best interests to make sure you are clearly self-employed and remaining IR35 compliant so it’s best to know your contracts inside out before you sign.<\/p>\n You’ll want to point a discerning eye at the details of your contract to assess the following:<\/p>\n In essence, inside IR35 means the client pays Income Tax and NICs (employers and employees) to HMRC. It also means the freelancer does not receive any benefits that an employee would have access to. The client must make this decision before engaging a freelancer and then fill in a Status Determination Statement (SDS). They must then provide the SDS in writing to the freelancer before the assignment begins.<\/p>\n However, if a client is based overseas and doesn’t have any UK offices, the new rules do not apply.<\/p>\n If HMRC decides to investigate you, you will first receive an opening letter to which you will need to respond with a breakdown of your income, expenses, contracts, and an explanation of why these contracts should be outside IR35. After that, if you haven’t provided sufficient proof, you may be called for a meeting with HMRC compliance to provide more information. However, you can request the inquiry continues by post rather than face-to-face.<\/p>\n Generally, the inquiry will focus on one specific tax year. And after HMRC has gone through all the evidence, they will make a decision. You may appeal if they determine you are insider IR35, however, there are costs involved.<\/p>\n<\/div>\n<\/div>\n<\/div>\n Here are some tips to making sure you stay on the right freelancer side of IR35:<\/p>\n<\/div>\n Freelancers providing services will always be susceptible to accidentally falling outside the new IR35 regulations. Keeping thorough records, reading through your contracts carefully before you sign on, and keeping under the radar of HMRC, as all sound ways to ensure compliance.<\/p>\n<\/div>\n<\/div>\n<\/div>\n Notably, freelancers and contractors do not have to pay penalties for errors relating to off-payroll assignments for the first year.\u00a0 Additionally, the new rules will only apply to services carried out from 6 April 2021.<\/p>\n You can also check out our\u00a0IR35 checklist<\/a>\u00a0to make sure you have everything in order.<\/p>\n This article does not constitute legal advice.<\/i><\/b><\/p>\n The opinions expressed in the column above represent the author\u2019s own.<\/i><\/p>\n Start managing your legal needs with Zegal today<\/b><\/a><\/p>\n BECOME A ZEGAL REFERRAL PARTNER<\/a><\/p>\n ABOUT\u00a0<\/b>ZEGAL<\/b><\/a><\/p>\n Zegal is the end-to-end platform for the legals smaller companies need.<\/p>\n Our story<\/b><\/p>\n Zegal was founded in 2014 by lawyer friends Daniel Walker and Jake Fisch. Having been a part of the system that preserves quality legal advice only for those that can afford it, the two were determined to build a model that delivers the \u2018corporate law firm\u2019 experience to small business.<\/p>\n Today Zegal is the world\u2019s only end-to-end platform for smaller companies to create, negotiate, and sign both the simple, and complex contracts they need to run their business, with expert legal advice, 100% online every step of the way. Since our launch, we have helped more than 20,000 companies close commercial contracts, run leaner HR teams, and enter new markets. You can use Zegal for your company in the UK, Australia and across Asia. Make your legals simple.<\/p>\n READ MORE: UK Startups: Essential Legal Documents<\/a><\/p>\n<\/span>How to determine your IR35 status as a freelancer<\/span><\/h3>\n
\n\n\n\n
\n
<\/span>Inside or Outside IR35?<\/span><\/h3>\n
\n\n<\/span>If you are chosen for an IR35 inquiry<\/span><\/h3>\n<\/div>\n<\/div>\n
\n\n\n\n\n<\/span>How to be outside IR35<\/a><\/span><\/h3>\n<\/div>\n<\/div>\n
\n\n\n\n
\n<\/span>Important to note<\/span><\/h3>\n