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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.