IR56
In order to know whether IR35 affects yourself you need to know if you are deemed employed or self employed. As this is not clear from the IR35 legislation the HM Revenue & Customs issued IR56 to help clarify.
The IR56 asks questions to establish the control, financial risk, mutality of obligation that is important in determaining an individual to be self employed as opposed to deemed employed.
Example questions used to establish employment status (IR56 test)
- Do you have to fulfil the contract personally (as opposed to subcontracting or using a colleague)?
- Do you have a line manager at the client who tells you what to do and how to do it?
- Are you working fixed hours in relation to pay?
- Do you risk your own money?
- Do you provide all the main equipment required to complete the job?
The results of the IR56 test will help determine your status, however this is just a guide and a lot of it is open to personal interpretation.
The uncertainty of employment status makes an Umbrella Company such as MyPay very attractive as it guarantees that you do not breach any IR35 regulation. This means regardless of employment status you will be 100% compliant when you use MyPay.
For information on IR35 click here.
For information on MSC legislation click here.
