Employment Status and IR35

Generate an image of a professional office environment with freelancers discussing contracts; include visuals of a balance sheet and tax documents to highlight themes of employment status and IR35 regulations.

Understanding Employment Status and IR35

Test your knowledge on IR35 regulations and employment status through our engaging quiz! Dive into real-world scenarios and determine the correct employment classifications based on current laws.

Assess your understanding of IR35
Gain insights on employment law
Enhance your knowledge applicable to freelancers and employers

4 Questions1 MinutesCreated by AnalyzingRisk102

Sarah has been offered work with the GMC, who have a balance sheet of £5.5 million and turnover of £11 million. They want her to provide her services as a Production Manager on a new show to air on a streaming site. The work is for a period of 9 months.

GMC are contracting Sarah through her personal service company. The contract states that she is able to provide a substitute but the reality is that she can't. They need her to work on the project 5 days per week and all of her time is devoted to working on the show.

What do GMC need to do relating to IR35 and what would be the likely status under employment law?

GMC don't need to do anything. Sarah is self-employed.

GMC need to provide a status determination statement and pay tax as though Sarah is an employee. Sarah could be an employee or worker.

GMC need to provide a status determination statement but Sarah is outside of IR35. Sarah is self-employed.

David has been offered work with the NMT, who are setting up a new production company. They want David to provide his services as an Editor on a new show to air on TV. The work is for a period of 3 months working 2 days per week.

NMT are contracting David through his personal service company. The contract states that he is able to provide a substitute and NMT allowed this on 2 occassions. David is able to work on other matters at the same time and he is actually working the other 3 days each week working on a movie.

What do NMT need to do relating to IR35 and what would be the likely status under employment law?

NMT don't need to do anything. David is self-employed.

NMT need to provide a status determination statement and pay tax as though David is an employee. David could be an employee or worker.

NMT need to provide a status determination statement but David is outside of IR35. David is self-employed.

Laura has been providing services as Head of Production to GMC through her personal services company. She is listed on their website as a team member and has been providing services in this way for 7 years, working 5 days per week, Monday to Friday. She has never sent a substitute to cover her absence.

GMC (with a balance sheet of £5.5 million and annual turnover of £10.5 million) force Laura to work in this way. She therefore invoices GMC monthly and pays herself in dividends and a low salary on the basis she is outside of IR35.

Laura thinks that she should now be an employee and on 14 May 2020 she states to GMC that she should be an employee. They don't respond.

Does Laura fall inside IR35 and if she does who is liable for any underpaid tax?

Laura doesn't fall inside of IR35. There is no underpayment of tax.

Laura falls inside of IR35, but she is responsible for the underpaid tax.

Laura falls inside of IR35, but GMC are responsible for the underpaid tax.

Lenny has been providing services as an Editor to DVC through his personal services company. He is listed on their website as a team member and has been providing services in this way for 2 years, working 5 days per week, Monday to Friday. He has never sent a substitute to cover his absence when he takes a day off.

DVC have 10 employees and turnover of £500,000. They force Lenny to work in this way. He therefore invoices DVC monthly and pays himself in dividends and a low salary on the basis he is outside of IR35.

Lenny thinks that he should be entitled to holiday pay but he doesn't get any pay when he takes time off.

What is Lenny's likely employment law status, and is he entitled to holiday pay?

Lenny is self employed. He's not entitled to holiday pay.

Lenny is self employed. He is entitled to holiday pay.

Lenny is likely to be a worker or an employee. He is not entitled to holiday pay.

Lenny is likely to be a worker or an employee. He is entitled to holiday pay.

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