IR35 Status Determination
Now that April 2021 has passed all new contracts need to be evaluated against the IR35 criteria, and a determination made if your contract is inside or outside of IR35, once this determination is made all parties get a copy of their status determination statement this document shows the reasons behind the status decision.
The introduction of IR35 has brought with it a mini industry made up of Umbrella payroll companies and many sites offering Individual IR35 determination tools, the quality of these is varied, with some offering insurance to cover any penalties from HMRC if they are found not to have been compliant.
HMRC themselves have introduced a tool called CEST or Check Employment Status for Tax, click the link and try it for yourself, the tool indicates that HMRC will stand by any determination made using it, provided you save and download a copy of the form and the result, CEST has however been involved in legal cases where where their determinations have been challenged, so whilst helpful as a guide, care should be taken as it only asks limited questions and therefore can not cover all situations.
If your contract is inside IR35 check our Ltd company vs Umbrella payroll calculator to understand how that impacts on your take home pay.
Taking a role with FD Capital and IR35
The type of role you are engaged to undertake is the key here.
CFO or FD Role
If you take a role which is to act as a CFO or FD then you will fall within IR35 as both of these roles are office holder roles as far as the legislation is concerned. Here is a screen shot showing one of the first question the CEST tool asks:-
Workers Duties.
Will you be an Office holder?
This can include a board member, company secretary or company director. If you are presented to external parties as an office holder it doesn’t matter that you are not shown on companies house.
It doesn’t matter if the role is part-time, interim or permanent as the role you will be performing is that of an office holder.
If the answer is Yes then the answer is immediately:-
Off-payroll working rules (IR35) apply