Resource Centre

‘Inside IR35’ is, in a nutshell, when someone ‘looks employed’. This could mean that their working hours are dictated by their end client, who also provide their equipment, and things like a company laptop and lanyard. Before IR35, companies were able to exploit the system to get away with not paying taxes such as National Insurance. It also allowed for exploitation of contractors, as they’d face the same restrictions of employees, such as not being able to control their working schedules, while not receiving the benefits such as a pension, maternity/paternity pay and sick pay. 

Let’s go back to our example, and imagine our freelance cybersecurity consultant was contacted by ‘Pie Hard Ltd‘, a pie and baked goods manufacturer. They had just been hit with a cyberattack, so wanted to ensure it didn’t happen again, so they sought out the assistance of a cybersecurity consultant. However, they wanted this consultant to work in-house, on the same work schedule as their full time employees. What’s more, once the consultant had set up the firewalls, they wanted them to continue to monitor them.

This contract is likely to be Inside IR35.

Now, while the consultant could continue to work through their limited company, (Phishin’ Impossible), they would legally have to calculate the amount of tax and NI they need to pay, or risk HMRC investigations or fines. However, this causes them a lot of confusion and stress, and takes up their time – time they could better spend doing what they do best!

Umbrella Employment is a solution to this.

By joining Trafalgar Umbrella, you’ll become an employee, a setup that naturally places you outside the scope of IR35. So, we’ll handle your tax and NICs through PAYE.

It’s a straightforward solution to the IR35 conundrum, allowing you to focus on your work without handling the complexities of tax legislation.