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What is IR35?

IR35 is UK tax legislation designed to determine whether a contractor is genuinely self-employed or effectively working as an employee for and therefore should be taxed as such.

For you as a contractor, this legislation will impact the way you are paid during an assignment and how you are taxed.

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Who does IR35 apply to?

IR35 rules apply to:

UK taxpayers who provide services for assignments both in the UK and outside of the UK either through:

  • A limited company

  • An umbrella

  • A PAYE engagement

What's the difference?

Inside vs. Outside IR35​

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    Inside IR35

    If the role is deemed "inside IR35", you can work either via PAYE or through an umbrella solution. Through this, you will receive the same benefits as an employee, such as:

    → Statutory Sick Pay

    → Holiday pay

    → Workplace pension contributions

    You will also be treated as an employee for tax purposes, meaning Income Tax and National Insurance Contributions will be deducted at source.

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    Outside IR35

    If you accept a role that is deemed "outside IR35" you will work through your Limited Company. Typically, this is for project based/independent engagements. This means that you will not be entitled to:

    → Statutory Sick Pay

    → Holidays pay

    → Parental leave

    Furthermore, you will be responsible for paying and calculating your own tax obligations.

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Do I need IR35 insurance?

It is important to have IR35 insurance if your assignment is outside IR35 because it protects you as a contractor and your Limited Company if HMRC challenges the IR35 status decision. IR35 insurance helps cover the cost of legal services and potential claims.

Always keep a clear audit trail, including your Status Determination Statement (SDS) and supporting documentation. This means that if your employer is responsible you will have records of how the IR35 status was assessed.

Those inside IR35 do not need insurance as they are covered by their umbrella/PAYE's insurance as their employer.

If your looking for a place to start, click here

How Vallum supports you...

Vallum have partnered with Kingsbridge, a trusted IR35 and insurance provider to mitigate compliance risks for you.

Get a quote

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    IR35 status assessment

    We conduct IR35 assessments through our internal tool to ensure your assignment is correctly determined. This helps you stay compliant without needing to manage the process yourself.

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    Tax liability protection

    We recommend securing IR35 Protect insurance to safeguard against potential tax liabilities if your status is ever challenged. Our partner, Kingsbridge, offers reliable coverage options.

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    Transparency & audit trail

    You’ll receive a full copy of your questionnaire, giving you complete visibility into how your IR35 determination was reached, ensuring a clear audit trail.

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    We are here to help

    Vallum supports contractors whether their role is inside IR35 and require umbrella solutions or their role is outside IR35 and they need limited company advice. We have a reliable compliance ecosystem that ensures that no matter the outcome, you are compliant and protected.

Our compliance & contractor care team

Cheryl Mann
Clarizze Balagat
Ebun Anifowoshe
Betty Kurpas
Klaudia Warchol
Jillian Carr-Carolus
Janine Letitia Mannel

FAQs

Who is responsible for determining IR35?

We receive the determination from the client, or we conduct it ourselves on behalf of the client using our internal tool. As a contractor, your sales consultant will let you know if the assignment is inside or outside. We will support you in either scenario, whether its using our list of trusted umbrella partners or advising workers with limited companies.

Can IR35 status change during a contract?

Yes. If the scope of work or working practices change, your sales consultant will notify you of any changes as soon as possible. If this does happen we will assist every step of the process.

What if I don't assess IR35 properly?

You could be liable for backdated tax, NICs, interest, and penalties from HMRC.

If the assessment is outside of IR35 do I have to use a limited company?

Umbrella/PAYE solutions can be used for inside and outside roles. It just means that you will still pay Income Tax and National Insurance Contributions.

Can Vallum manage IR35 determinations for us?

Yes definitely! We provide fully supported IR35 solutions, including assessments, audit trails, and ongoing compliance support.

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Let's make IR35 simple

IR35 doesn't need to slow you down. If you have any concerns or want to make sure your contractor engagements are set up the right way from day one.

Speak to our team today.

Contact us