IR35 Checklist
The following is a non-exhaustive checklist of some of the factors the Inland Revenue would use in assessing whether income from a particular contract is subject to the IR35 rules:
| Badges of Trade | Indicative of Self Employment | Indicative of Employment |
| BASIS OF REMUNERATION | Remunerated on a project basis, or at a fixed price. | Remunerated on a time basis. Paid holidays, sick pay etc. |
| RIGHT OF CONTROL | You have the right to decide how, when and by whom a job is done. Can send substitute to do job. | Close directional supervision by your client (master – servant relationship). Client can dismiss you. |
| TOOLS OF TRADE | You supply large or expensive equipment, and may work from your own premises. | Provision of only small or no equipment. Work at client’s premises |
| TRADING STRUCTURE | Trade with more than one client at a time, or work on short successive assignments with different clients. | Long term assignments with the same client. |
| FINANCIAL RISK | A loss can be suffered. All rejected work to be corrected at your own cost. Penalty clauses. A larger profit can be made from sound management. | No financial exposure. All rejected work to be corrected at your client’s cost. |
| BUSINESS ORGANISATION | Own premises, letterheads, other employees, insurance etc. Quoting for jobs in advance. Advertising | None. |
| TERMS OF ENGAGEMENT | Contracts or understandings which record the above. | Contracts or understandings which do not record the above beneficial badges of trade, or no contracts at all. |
If you are unsure of your position regarding a contract then feel free to contact Lewis Smith & Co. and we will do our best to help.
