What Does An IR35 Accountant Do?
How to find an accountant who genuinely specialises in IR35
If you’ve been shopping around for a contractor accountant recently, you may have seen a few marketed as ‘IR35 accountants’. As a contractor, given the financial implications of IR35, it’s incredibly important that you and your accountant understand what IR35 is, how it impacts you, and how you can ensure your compliance.
So without further ado, what is an IR35 accountant, and how can you tell if they are a legitimate expert?
What is an IR35 accountant?
While not a technical term, an IR35 accountant should specialise not only the needs of contractors but also the complex tax legislation known as IR35. As you might well know, the IR35 legislation is in place to prevent contractors working as ‘disguised employees’ and therefore paying less tax.
No ‘magic’ IR35 solution
It goes without saying that an IR35 accountant must have an in-depth knowledge of the legislation. However, be wary of contractor accountants who claim there is a magic accounting solution that circumvents the legislation. In short, there isn’t.
While a trusted IR35 accountant will be able to explain the rules in simple terms, advise you on best practice and put you in touch with qualified experts, it’s not up to them to ensure that your contract isn’t caught by IR35 – this responsibility lies with you or your end-client.
A range of IR35 services
A good contractor accountant will be able to provide specialist IR35 advice and should also be able to refer you to an employment status specialist who can help you better understand your IR35 position. If this status specialist thinks you’re caught by the IR35 rules, they’ll recommend changes to your contract and working practices to help place you outside the legislation.
An IR35 accountant should be able to recommend a supplier of IR35 insurance, which will cover the costs of representation should HMRC open an investigation. Some policies will also cover any back taxes you may be found to owe following an IR35 enquiry. Given such investigations can add up to eye-watering amounts rapidly, it’s worth having this cover for peace of mind – even though from 6th April contractors will not carry the IR35 risk unless they are engaged by a ‘small’ private sector firm. This is because HMRC can look into contracts that finished up to six years ago.
How to find a trusted IR35 accountant
Most contractors choose their accountant based on recommendations from friends and other people in the same industry. They also prefer to prioritise how experienced the accountant is at dealing with the specific needs of contractors and their knowledge of key tax issues, including IR35.
It is important to consider other factors too:
Check the accountant is registered
Are they associated with a professional body? If not, ask. Appointing a chartered accountant, usually registered with one of three organisations – ACCA, CIMA or ICAEW – will ensure you get an accountant who has the necessary expertise and qualifications and also follows strict standards and codes set by these industry bodies to protect you.
Read online reviews
There are plenty of reviews out there that contractors have taken the time to write. For example, more than 200 contractors have kindly given QAccounting a 4.56/5 star review, which we’re very proud of. Online trust scores aside, it’s also worth checking out contractor forums for recommendations of some of the leading contractor accountants in the industry today.
Why engage an online IR35 accountant?
While some contractors choose to engage a local accountant who they can meet with in person, a growing number are now opting for online contractor accountants. Knowing your business and its specific needs usually outweigh the benefits of being able to meet face-to-face.
These accountants will have access to the latest tax legislation information, are well-resourced and have an in-depth understanding of the tax rules targeted at contractors and freelancers. An IR35 accountant will also be acutely aware of the nature of contracting, understand that gaps between contracts are commonplace and therefore offer flexible packages tailored to your needs.
Whoever you choose, your accountant should help ensure that you’re compliant with all the latest tax rules, including IR35.
With over 20 years’ experience in supporting contractors, QAccounting is one of the UK’s leading contractor accountants. Offering a range of trusted accountancy services, including IR35 contract reviews through our partner, Qdos Contractor, we are rated 9/10 by contractors. To learn more about our IR35 services or accountancy packages, please arrange a callback.