IR35
- Genuine Contract - Ltd
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| What does it mean if I am deemed to be a in a Genuine Contract? | ||
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Those Contractors
who can demonstrate themselves to be working on genuine projects can
continue to operate their Limited Company as they do now.
With revised contracts to reflect the work actually being carried out on site, the Contractor is allowed to continue drawing Dividends on monies earned by the company and this also allows the continued use of share splitting arrangements where they are applicable. Care must be taken to ensure that the contract actually matches the work being done and that there is not just a paperwork exercise. You can also carry out a self-test using our Engagement Tester
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| What sort of things make the engagement look "genuine"? | ||
| There are a number
of features which go together to make a "genuine contract" as
defined by the Inland Revenue -
these include:
Fixed Term Project - you tender and agree to complete a set of deliverables by a certain date. Beware - if the project Payment on milestones - payment is made for work successfully undertaken, rather than for hours worked. Financial Risk - are you prepared to continue working at your own cost to complete the project if you don't meet the agreed deliverables by the completion date? Also - are you prepared to go back to put it right at your own cost if there are problems with your work? Right of Substitution - you can send someone else in your place to do the work if necessary. Do you have the ability to recruit and pay that person as an employee or sub contractor of your company? Can you demonstrate this to the Inland Revenue? Bonus Payments - for successful completion of work on time. You can see an extended list of factors in the Frequently Asked Questions manual under question 7. You can also carry out a self-test using our Engagement Tester |
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| Where can I read more? | ||
| Have a look at the Frequently Asked Questions section on this website and visit regularly for updates. | ||
