Starting Out

This may sound obvious but you will need to sign a contract with your agency/client before you begin working with them. This is a legally binding document which you should read thoroughly before signature. If there is anything that you are not happy with in the contract you should let the agency, or client, know before it is signed. You should also make sure that you fully understand what is contained within the contract – if you are not sure you should ask your agency/client. If you do not adhere to the terms set out you could, potentially, be sued for breach of contract.

Your contract will cover what is expected of you whilst you are working on the client site in terms of Health and Safety, fire regulations, dress code etc.

New to the UK?

In order to work in the UK you may need a work permit or a visa; you should check whether or not this is the case before you approach an agency or an Umbrella Company. Follow the link to find out more about visas in the UK.

 You will also need a National Insurance Number which is a personal number that is used to record an individual’s NI contributions and credited contributions. You should apply to the Department of Work and Pensions as soon as you begin work. You will have a face to face interview and you may need to fill in a form as well. You will be required to provide certain documentation for the interview – more information can be found on the government website.

If you work through an Escape9-5 Recruitment you must ensure that you have a UK bank account so that payments can be made to you via electronic transfer. You should contact the Inland Revenue when you arrive in the UK and you will normally be asked to complete a form P86 which will enable them to determine your residence status for tax purposes. You can find more information regarding tax residency and potential liabilities by following the link.

What is IR35?

The IR35 legislation was introduced by the Inland Revenue in April 2000 and was intended to combat tax avoidance. It affects all contractors who do not meet the Inland Revenue’s definition of ‘self-employment’ and applies to anyone working via an intermediary such as a company or partnership. Since the introduction of the legislation contracts can be ‘tested’ to confirm whether they fall inside or outside of IR35. These tests are used to determine whether, if it were not for the intermediary, the contractor would be an employee of the end client. The contract must be totally representative of the individual’s working practises and would fail the IR35 ‘test’ if this is not the case.

Is my Contract Caught by IR35?

The Inland Revenue have put together a number of simple questions that you can answer which will help to determine your status. If you answer ‘yes’ to the following then it is likely you will be deemed a ‘disguised employee’ and will therefore fall inside IR35:

- Do you have to do the work yourself

- Can someone tell you at any time what to do, where to carry out the work or when and how to do it

- Will you work a set amount of hours 􀀹 Can someone move you from task to task

- Are you paid by the hour, week or month

- Will you receive overtime pay or bonus payment

If you can answer ‘yes’ to the following questions it is more likely that your contract will fall outside of IR35:

- Could you hire someone to do the work or engage helpers at their own expense

- Do you risk your own money

- Do you provide the main items of equipment you need to do your job, not just the small tools that many employees provide for themselves

- Do you agree to do a job for a fixed price regardless of how long the job may take

- Can you decide what work to do, how and when to do the work and where

What does it mean if I am Inside IR35?

IR35 determines the way that you are paid. Before the introduction of the legislation contractors invariably worked through their own Limited Companies and drew dividends from the profits, which do not attract national insurance contributions. However, the Inland Revenue determined that, if a contract falls inside IR35, the contractor would be obliged to draw a salary from their company. For contractors who had a Limited Company but no staff this meant that they were both employer and employee and subsequently both employee’s and employer’s national insurance were payable.

From April 2007 contractors will only be able to receive dividends if they operate their own personal limited company. If they receive payment through an intermediary then they can only receive payment via PAYE which means paying income tax and both employee’s and employer’s national insurance.