Limited company and IR35

cheapshots

Hi guys,

I've had a good look through the posts however I couldn't find what I was looking for..... Maybe you guys can help

I'm a locum pharmacist and have set up a Ltd company.

In pharmacy world there are two main employers:
1) Community (Boots, Lloyds, Superdrug, Tesco, etc.)
2) The NHS (different Trusts around the country)

From 1st August 2009 to 28 September 2009 I was travelling throughout the country working in different community pharmacies.

Since then, I have been working at the same NHS trust (via a locum agency) during weekdays and will probably continue to do so until March 2010. I am paid on an hourly rate, my working hours are not always the same as it depends on whether I'm needed, I get no annual leave or no sick pay and I have a 1-week rolling contract.

My Ltd company has two employee's - myself and a secretary who keeps the admin side nice and tidy. Regardless of what money comes into the Ltd company the wage I receive is fixed.

I'm absolutely paranoid about IR35, so to calm myself I also work one or two Saturdays / Sundays in different community pharmacies every month.

In your honest opinions do you think I will fall into the IR35 legislation?

Cheapshots
(apologies for the long post!)

Fulham_Mark

it's always a tricky one and so what you read is mostly people's opinions.

Try some contractor discussion sites as they are always discussing it.

The IR35 aspect seems to be between your company and your clients so the contract you have with them is very important. You can get this validated and then insured against IR35 problems if it passes.

Most people would worry about IR35 if they:
- have one client for a long time
- go to the same office everyday
- use their client's equipment
- there's not much to differentiate them from a permenant employee

to date something like 10 out of 500 investigations have resulted in a ltd company being fined for IR35 but a lot of that is down to clients and LTD companies getting their acts together over working contracts.

A good yard-stick is whether your contract details how your company is responsible for providing a replacement/substitute for you. If it doesn't then I'd seek to renegotiate a new contract that would pass IR35

IR35 is there to stop high paid celebs etc deciding to set up a LTD company to avoid paying NI. It's not out to get people who are genuinely prepared to work on lots of short term contracts

Rolo_Tomasi

As the above poster has said it is all down to opinion. The only way to get a definite answer is to ask the Revenue. From your post, my opinion is that you are just the type of business to be caught by the IR35 legislation but whether or not the Revenue could successfully apply this would depend on your contracts.

The Revenue have an employment status indicator here which, although is not designed for IR35 purposes, does use much of the same legislation. If you come back an employee you are likely to be caught by IR35

Pennywise

Following the Dragonfly case, probably the most important indicator as to whether IR35 applies or not is whether the end-customer, i.e. the NHS trust, Boots, etc., are giving your Ltd Co a contract to provide "a pharmacist" or whether they are contracting through your Ltd Co to engage "you". If the end-customer are expecting to see you at their premises to do the work, and wouldn't accept you sending another pharmacist, then the chances are that you are caught by IR35. If, however, they aren't bothered, and, say Boots are happy as long as any suitably qualified pharmacist turns up, then the chances are that IR35 doesn't apply. Remember that IR35 is "per contract" - it is quite possible that some contracts could be caught whilst others aren't. You really do need to talk to a specialist - there are some excellent firms, such as QDOS consulting, bouer & cotterill, etc., that are highly regarded specialists in these areas.

cheapshots

Thanks for the replies guys.

Unfortunately, the employment status indicator could not determine my employment status.

To answer some of your questions: Yes, if I am unable to go to work whether it be Boots or an NHS trust then they can employ another suitably qualified person to do the job, i.e. my Ltd company will not need to provide for them.

That's a very good point you make about IR35 being "per contract"

I think I might call the Revenue or my accountant and discuss with them my situation. Argggg, it's such a hassle!

TM1976

cheapshots wrote: »

To answer some of your questions: Yes, if I am unable to go to work whether it be Boots or an NHS trust then they can employ another suitably qualified person to do the job, i.e. my Ltd company will not need to provide for them.

Actually what is meant here is say you couldn't turn up one day and sent someone else down to do the work Boots or the NHS were expecting would this be acceptable to them? ie is the contract for the services you provide or is it for your services.

cheapshots wrote: »

That's a very good point you make about IR35 being "per contract"!

Perhaps I don't need to point this out but what this means is the other locum work you accept has no bearing on whether the big NHS contract is IR35 or not so you don't need to accept other work to proove you are not IR35.