IR35 changes Articles

How do umbrella companies avoid IR35?

Umbrella companies allow contractors to achieve IR35 compliance. If a limited company contract is deemed ‘inside IR35’, contracting through an umbrella company is usually preferable.

This will become more important as an upcoming rule change will mean that many more contractors are caught out by IR35 legislation.

MPs have reacted angrily to a fresh expenses crackdown, which could mean that they would be housed in ‘special serviced accommodation’ whilst staying in London.

News of this proposal comes just weeks after the Chancellor announced that some contractors caught out by IR35 legislation will no longer be able to claim travel and subsistence expenses in the new tax year.

Under the current guidelines, MPs are allowed to claim up to £20,600 per year for renting a London property. They can also claim a maximum of £150 per night if they stay in a hotel.