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  • welcome.

  • Everybody's juniper links accounting.

  • And if you find on this page you're probably looking for some answers to some very confusing and complicated questions.

  • So today I'm gonna try to break this down as simply as I can about what is Iron 35 I are 35 explained.

  • And also how to avoid ire 35.

  • And we'll go through all of those questions for you hands.

  • Make sure you leave this page being an expert on my 35 or or thereabouts, I'm basically just gonna outline the article that is below this video for you guys.

  • All right, So, seriously, we want to know.

  • Does hire 35 apply to me?

  • Basically, if you are freelance there any kind of contract worker you can be running your own limited company doing contract work.

  • You could be totally freelancer just doing work for various clients.

  • You could be a sole trader any time that you're doing contract work for someone and you are not a direct employees of whoever you're working for.

  • So they just give you payments and it's not deducted from tax or anything.

  • Sometimes it can be through CS anytime.

  • You're not an employee.

  • You're not on that company's payroll.

  • As an employee, you could be at risk of our 35 so we'll go through the I R 35 rules basically show you the points.

  • The H.

  • Marcie will look at one deciding your status in an investigation.

  • Obviously, they'll try their best to to return.

  • It's in such a way that you will be caught inside are 35.

  • But that doesn't always hold up in court, So we'll have a look at these rules now.

  • The 1st 1 is control.

  • This is a very important one.

  • If you happen to be in a brother worker or have been in the past, they're just thing called S D.

  • C.

  • Legislation supervision, directional control.

  • And basically you cannot claim expenses through umbrella.

  • If you are supervised, directed or controlled by the Claire working for and it's just another with HMRC can get thio you and just be like you can't claim these expenses.

  • You're gonna have to pay this out of pocket because you are basically controlled by the client and it's just not gonna cut it with.

  • I are 35.

  • Control is essentially the same thing, but you have to be sure you're not treated like an employee in an employment role.

  • You would be instructive pretty much all the time.

  • You need to do this.

  • You need to do it like this and get it done today or tomorrow, whatever you'll be told what to do all the time.

  • As an employee, you don't really have your own agenda and your own schedule that you created a new went ahead and just did it.

  • The best example I can give you is a plumber.

  • Obviously, plumbers can be employed.

  • The best thing I can give you.

  • The plumber you call your plumber.

  • He arrives at your house.

  • You tell him the toy that's broke, the plumber fixes the toilet.

  • You don't know how to fix the toilet yourself.

  • You don't tell him how to do it or anything.

  • The better just gets on with his business, and that's essentially control.

  • It's important not to be controlled by your end client, and if you feel like you are, then you might want to make some changes.

  • Pretty soon because you could be at serious risk of being caught inside are 35 now Let's move on to the next rule of financial risk.

  • Hmm.

  • I see.

  • I want to see that you as a business or as a you know, so self employed person have substantial business risk.

  • And you don't rely on your end client for any kind of fallout.

  • So the easiest way to kind of show this is through business insurance.

  • It would be public liability insurance and professional indemnity insurance and in some cases, employers liability if you're running your own company.

  • So this insurance kind of proves a little bit of evidence.

  • It's more evidence to back up your claims, but it proves that your company or you as a soul, self employed person have business risk.

  • If you were to mess up work that you've done, or if you hired someone and they messed it up for you, then you would be liable to go fix that work at no extra cost to the end cut.

  • And if that sounds like something that you would do or I know it's a little bit difficult with things like I t.

  • As long as you've got that business insurance and you would be expected to fix stuff and sometimes not the best example for I T because it is kind of including your day.

  • But as long as you are expected to fix the air and cost on your own time than your goods, you've got financial risk.

  • Also, you have no guarantee that the client will pay you for the work you've done.

  • That's another financial risk factor.

  • All right, Next point is brightest institution.

  • Essentially.

  • What it says is that you, as the contractor could bring on board some other random contractor or your own employees.

  • Even let's say that to the client for them to do the work that they expected you to do with no riel issue.

  • So maybe they have to get security checks done on them.

  • Maybe they want to know they want to see the person's qualifications, something like that, just to quickly check that they can actually do what you were expected to do.

  • If you've got that ability on, you have executed that ability than you are extremely in good position with the right of substitution.

  • So thank you.

  • Marcie ever asks like you know, that's like their biggest one right now is write a substitution If you have substituted someone to do the work for you, then you are pretty golden in H.

  • Marcie's eyes of our 35.

  • But of course, you need to have more than just just that ability to pass their tests.

  • So if you are not able, Thio or your contract says you are able to when you go and ask your client, can I actually send in this person to do the work for me?

  • And they say, No, that's a potential problem there because they've essentially the contract, and what you can actually do doesn't line up.

  • So double check.

  • You can actually substitute someone else to do your work as long as I've got the same qualifications.

  • As long as they're able to do things work and they say yes to that, then you're fine.

  • And also, the best way to prove that you've gotta write a substitution is to just send in a substitute on occasion and just be like if hmrc ever asks, opens an investigation for over 35 you be like, Look, I sent in the substitute, you know, in there that there's definitely write a substitution there, says that my contract says it here, But as long as you've got that going for you.

  • That is good.

  • Very good.

  • Next up is mutuality of obligation.

  • This sounds very strange, but it's actually very simple.

  • Essentially, it means you are not obligated to provide further work or further service is to the incline, and they're not obligated to provide you with any more work.

  • So as an employee, you would be pretty much expected to stay on site on Dhe.

  • Even if you finish all your work for the day, the employer will be sending you more work to do.

  • Very scene there.

  • They're gonna keep you occupied for the full full eight hours or whatever you work.

  • That was a contract to.

  • The difference is if he finished your work for that day or if you finish the job you were doing.

  • There is no expectation for you to carry on doing other things for that client.

  • You're you're done.

  • You finished a contact, you're done.

  • And let's say your contract is a longer contract because it's like a duration of her period time working on a big project on Let's say, you know, the computer systems are not working that day.

  • You as a contractor cannot possibly carry on any further work for what you were doing.

  • Specifically the client.

  • You do not have to stay there.

  • You could leave.

  • If there's nothing to do, you just leave because there's no reason for you to be there, not getting paid for your time.

  • That's a very significant thing to look out for.

  • His mutuality of obligation should be in your contract as well.

  • If you don't have, like a proper contract, it's just a purchase order.

  • That's fine, too.

  • You know, it kind of is almost even more solid because they're not even acknowledging that there could be any kind of issue.

  • It's just like we've purchased service from you.

  • Just do it that kind of thing.

  • So or if you're a sole trader, you know, if you go to do something for someone, then you finish.

  • Then you don't have to stay there.

  • You just leave your time.

  • It is done.

  • It's done.

  • Don't you say that for any longer than you have to, and you can just go help or go to another contractor off now equipments.

  • So equipment is a very interesting one is no highly regarded as a rule, but we think that is quite important to be able to have your own equipment on dhe.

  • Use it as your own stuff.

  • You know, it kind of shows that you've taken responsibility upon yourself to have this equipment.

  • These tools to carry out your service is for any clients.

  • So multiple various clients.

  • And if your client has provided the tools and equipment for you to do your service is in some cases it's understandable because not because of security issues and things like that.

  • Like you can't possibly use your own computer because off whatever security issues and actually H.

  • Marcie has removed that from there are 35 tool.

  • So they don't count computers or phones for equipment, which is a bit of a shame, but it does, even if their tool doesn't doesn't add the same in court.

  • You know, if you do have to go to court for this, and you do show that you've got your own not stopped for work, you use your own phone.

  • Use all of your own equipment, you get your own stationery.

  • You don't use anything from the client, and it's all your stuff.

  • It's a good point half, but as a anyone else, that's if you have more than computers.

  • You've got such an electrical equipment that you need for testing or your plumber or any kind of sole trader type construction type person.

  • Then you want to have your own tools, like wrenches and drew on Saul's of whatever, whatever you need, they should be yours.

  • You should not be borrowing from the client You can borrow from the client, but it is not the best thing to do in cases in terms of Eire 35 now, intention of the parties is my final point, and it's very simple.

  • You should not feel that your clients wants you to be an employee.

  • They should ask you for that kind of stuff.

  • And you shouldn't want to be their employees like intention of the parties.

  • This is strictly a contract role.

  • There's no employment involved whatsoever.

  • That's intentional parties, and it's usually outlined a new contract as well.

  • And again, like I said with the purchase order, that's not even considering that there could be any issues they just buy.

  • Service is so intention.

  • The parties, they're they're buying a service from you.

  • There's no need to do this kind of like contract stuff, so as long as your actual working practices.

  • What I mean by that is what actually happens at the client site.

  • As long as those match up with all of the I 35 rules, then you're golden and just again keep records of everything, and next we'll talk about our 35 public sector means that there are no guarantees you'll be declared outside of our 35 even if you are legitimately operating like that.

  • So what happened is hmm, I see has sense the responsibility of determining your ire 35 status to the end clients in the public sector so you can see the W kind of a bit freaked out by this.

  • Whoa, what's going on?

  • We don't we don't really know anything about her 35.

  • And so what they started to do is dump everyone inside are 35 not really looking at what they're working.

  • Practices are anything like that, and it's caused a lot of trouble for a lot of people in the public sector.

  • They've had to either go the employment route that had to switch to umbrella cos they have to get dean payment through their limited companies, and it's just been a total mess, and it's not cool.

  • But HMRC has been trying to stop this from happening by releasing their H.

  • Marcie.

  • I are 35 tools, and what this is supposed to do is let the end client go through the questionnaire.

  • I think the tool in my article.

  • So just get on below, you'll see it there.

  • What this does is let the end client go through and see exactly what points each Marcie won't want to look for.

  • And they could just simply answer tick the boxes.

  • Which one?

  • The play.

  • Now this is great.

  • If they know if they filled out correctly, this is the next problem.

  • So the end quite well, just blatantly fill it out.

  • Totally wrong, right of substitution, daughters that now now you can't substitute.

  • And if you check the contract, their contract clearly says you are allowed to send in a suitable substitute.

  • And yes, so they're just not feeling them out correctly.

  • But it's more people fight the fire 35.

  • I know there aren't many people that would do it because they're not aware or the financial risk versus reward isn't there.

  • But if there is a high profile case that comes out, we'll hopefully see some serious changes once that happens in the private sector, even if they do roll out something like this.

  • H mercy.

  • Even if hmrc doesn't rule out another hole like the responsibilities for the inclined to decide your status, then they'll probably hire specific people that know about 35 because it's not financially viable For them to just deem everyone inside are 35.

  • It's not good business, so they'll go ahead and hire someone to check it out.

  • Now, How to avoid Ire 35.

  • This is a serious question people ask because they're like, I really don't want this problem.

  • I don't want to be taxed like six years worth of texts.

  • All the front like pay £50,000.

  • Just so.

  • So the easiest way to avoid Ire.

  • 35.

  • There are just some different pointers to consider when you're looking at your ire.

  • 35 status.

  • How you're treated by the end client.

  • You do not want to be treated anything like an employee.

  • Nothing like an employee.

  • Just keep that in mind.

  • Part and parcel is the first point I have, and it's essentially asking are you so important to the end client?

  • You are 100% integrated with everything they do on act just like the employees.

  • Do you have the same security clearance are required to stay on sites and use all their facilities just like all the employees.

  • And don't really have any distinction between employees and yourself used.

  • They're so used, their equipment, everything like that part and parcel.

  • So you are 100% integrated with the M client.

  • This is not good.

  • Things is not something you want.

  • Now.

  • This doesn't mean that if you are expected to stay at the client's site for the whole duration of the day because of the type of service is do you carry out So, like tech support type service is and you are a legitimate contractor.

  • This does not mean you're part and parcel.

  • You just have to have a little bit more evidence to back up your I 35 status, and it's likely that you will have different security clearance and other employees.

  • You may not be able to access certain parts of building.

  • Anything that separates you from the employees is a good thing.

  • On one of the main points as well.

  • Are you able to just take you just up and leave?

  • Go home and work from home?

  • If you felt like it for that day, you don't have to be at the site.

  • Obviously, not all roles well out for that.

  • But if you're able to do that, then definitely do that definitely take up the opportunity and work from home because it just proved again you didn't have to be there and involved with the client whole time.

  • You're just providing your own service remotely, Not really associate it with the client.

  • Now there is an important court case to remember, and it's a company called MBf Design Service is limited versus H.

  • Marcie, and this was back in 2011 are 35 has been an issue for quite a long time, and we can look at his case for many good examples on the difference between a contractor and an employee, which is what you need to prove to each Marcy every time you take up a new contract and a very strong part of the case to remember is that MBf and the person working for his own company was carrying out serves his four Airbus.

  • Their systems went down for however long and on occasion.

  • But this would just happen.

  • There's computer systems will be down at the guy, wasn't able to carry out the work because he needed the systems to be up on.

  • What Airbus did was just like right.

  • We've got nothing else for you to do.

  • You can go ahead and go home and you're not getting paid.

  • This is an important part because it shows there is financial risk.

  • So the guy you know, he was expecting toe work full day that day, systems and work.

  • He was sent home with no pay, and that's it also shows that he's not part and parcel off Airbus.

  • He's his own thing, and the employees were expected to stay that whole day and do other stuff that may or may not have been related to what he was supposed to do or they were supposed to be doing.

  • So This is the difference.

  • Contractors will go home.

  • There's no work.

  • Employees have to stay and do other things till the whole eight hours around.

  • And another really good strong point for this case was that there's very little notice for either party to terminate the contract that he was currently on.

  • So the guy could go to Airbus to be like, right.

  • I I don't I can't carry out more.

  • Service is I don't want Thio.

  • I'm terminating the contracts.

  • Starting smarter.

  • Sorry.

  • Like that.

  • That's it.

  • Um and that would have been absolutely fine.

  • He could have left that job Now with unemployment.

  • Obviously you have a certain notice.

  • Period is very long.

  • You have to like sending me a letter, and then they have to prove it.

  • And you eventually leave after training up a new person.

  • No, none of that here at the same time, Airbus could have turned to the guy said, This isn't working out.

  • We're gonna find someone else to do this or we really got no reason for you to work anymore.

  • We're out.

  • We're out of work for you.

  • We don't need your help anymore.

  • So return it in the contract tomorrow and that guy would have not come paid.

  • And that's it.

  • That's the end of the story.

  • So that's another important thing to look at and say, Consider when you're looking at your own iron 35 position.

  • Another very good way to avoid our 35 is to ensure that you are not asked to do.

  • Service is totally outside your agreement.

  • So let's say you're a contractor, you know, doing stuff the client side.

  • And they're suddenly like paying.

  • We need you to work in sales.

  • Can you do that for us?

  • And you're just a like, No, this is not This is not part of what I'm supposed to be doing.

  • So this is another thing to look at with your other 35 position.

  • You should not be expected to do anything else other than what you were hired for.

  • Just like a plumber.

  • Not gonna ask you pull my joke.

  • By the way, can you cook my dinner tonight like I just need that to be done is not like that.

  • It shouldn't be at all like that.

  • So if you are asked to do stuff outside of your service agreement, then what should happen is they should write up a new contract for that specific purpose and send you to do that contract.

  • Not just I'll just dump it on you while you're doing contract for something totally different and unrelated, and that's an important thing to keep in mind.

  • Staff events are another thing to consider.

  • Of course, you may be invited to stuff events to incline my even know invite you, which is Don't get offended is not the words thing that could happen because honestly, the staff events are for the staff employees, things like that.

  • And if you're no invited or if you're invited, but you're expected to pay for your own meal, food, drink, whatever they're doing, that's good because they know you're not part of the company.

  • They're not expected to pay for you, and you're there by your own choice.

  • So that's something to remember when going to staff events, and you have to remember why you're going to stuff them as well.

  • So is it for getting further clients?

  • Is it just have fun and socialized with the employees, which is not nothing ever.

  • But it's not frowned upon too much.

  • As long as you pay for yourself, just email yourself why you're there, especially if it's for business purposes and you're strong and you're trying to secure a new contract and other contracts with that client or other clients that maybe there.

  • And also possibly one of the best ways to make sure you are outside of Eire 35 is work more than one contract at a time.

  • This shows a CHM.

  • I see that you are definitely not an employee because I've seen very few very rare contracts that actually say contracts of employment actually say, Oh, yeah, You're free to go work for this other company.

  • You know as well during lunch or something like they're just not gonna let that happen.

  • I know you're working for this company.

  • You shouldn't be doing anything else other than work for this company for these times, like does a contract of employment.

  • As a contractor, you have bolt contracts, shows you are in business on your own accord.

  • You're running a legitimate business, whether it be salt trade or them.

  • It's a company or freelance.

  • So, you know, you've got different clients from all over doing bits and pieces.

  • It kind of shows.

  • It just reinforces the fact that you are a business, you know, an employee of one particular clients or multiple clients just didn't happen.

  • So that's one of the most solid waste.

  • And if you do have an opportunity to take small projects on the side alongside, like a main contract than do it, because it's extra reinforcement.

  • If HMRC ever investigates you or your company or what you're doing in terms of Fire 35 that is the most solid way to defend against it, especially in court.

  • They'll look at it.

  • They'll be like, Right, you've been doing all these other contracting works during this contract, you're able to send another people you're not controlled because you're doing your own stuff the whole time.

  • You just basically been hired to do this one project.

  • You've gone ahead and done it.

  • Nobody's told you how to do it.

  • There was no intent for employment and you had reasonable financial risk.

  • So if there was no work, you wouldn't get paid.

  • It's a simple Is that so?

  • That's I are 35 explains.

  • And simple fattest.

  • If you're running your own legitimate business, you have nothing to worry about in terms.

  • Fire 35.

  • The Iron 35 rules I've listed for you in the article are basically the main key ones.

  • You can go on to H.

  • Marcie's IRA, 35 told.

  • Have a look at that as well.

  • Its prey is a pretty solid tool, is got most of the points.

  • It's just an incorrect completion issue now.

  • Public sector.

  • So if you actually go on there and exploit yourself, you conceal the different options they've got.

  • End, you know, play around with what passes and what fails.

  • We've done quite a few of them, and a lot of them have passed in terms of being outside of Iron 35.

  • But again, we would have completed it based on the client's contract.

  • And they're working practices from a survey, and we would have looked all of that and answered the tool accordingly.

  • The end client probably won't do.

  • A survey probably went, Really look at your contract.

  • They'll just have someone there doing them and doing their best to fill out the tool.

  • So make sure it's done right.

  • Have a look at it.

  • And don't ignore Iron 35 because it could really, really give you a big stat in the back one day.

  • So make sure you're legit.

  • You're legit, operating as a company, and you obviously have evidence of that as well.

  • So thanks again for watching this video.

  • Hopefully, you guys found it useful.

  • If you do you have any further questions?

  • Feel free to contact me.

  • I'll be happy to help with our 35.

  • If you're not sure of your status, then you could also contact me for a contract review.

  • If you wish to do so, we'll see you again in another video.

  • Maybe hopefully.

  • But for now, I'll say goodbye.

  • Thanks a lot for watching.

welcome.

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