We take a look at the relationship between client and provider, examining the love triangle that is the contractor, the accountant and IR35.
IR35 really is a hot potato in the contracting world that creates more controversy than any other topic (even more than the shape of Margaret Hodge’s glasses). As a subject, IR35 is always only a couple of clicks away from some vast level of scaremongering or over-hyped hearsay on the internet, blogs and forums rife with public opinion. Because IR35 is such an important matter, contractors are at risk of reading often distorted information, and the internet can easily blur the lines between fact and fiction.
As a result of this, correct information and sound advice regarding IR35 matters is essential for the modern day contractor, and it is often down to the accountant to steer limited company professionals in the right direction.
The relationship between the accountant and the contractor is very important, and is built on a certain level of trust that the service provider (the accountant) has their client (the contractor’s) best interest in mind.
The label of the ‘IR35 Accountant’, the ‘Contractor Specialist’ is a title often seen when looking for accountants that cater to limited company workers. It is important, however, that any service provider claiming to be an ‘expert’ or to have a wealth of knowledge on the legislation and HMRC regulations are in fact as clued up as they claim.
Speaking to Seb Maley, tax and IR35 expert at Qdos Contractor, we ask just how important is it that a ‘contractor accountant’ is well-informed and experienced with IR35:
“For many contractors, particularly those who are just starting out in the game, their accountant will be the first port of call for IR35-related queries. Therefore it is vital that the accountant understands at least the basics of what is a confusing and rather complex legislation. Choosing whether to trade inside or outside IR35 is not a decision that should be taken lightly, so contractors will require a degree of hand holding from their accountant throughout the process.”
As reiterated here, a contractor’s accountant is often the first calling point from a contractor with regards to IR35, therefore correct and legally accurate advice and information must be passed on. There is a risk however that accountancies do not fit the criteria of an ‘IR35 specialist’, and contractors must be wary that their trusted service provider actually knows the information necessary to correctly guide them should any IR35 related activity occur.
Crunch Accounting’s Jon Norris highlights the importance of IR35 knowledge for accountants, pointing out that those with extensive IR35 awareness usually have recognitions or certifications showcasing their capacities.
“IR35 expertise is just another string to a good accountant’s bow. It’s important to remember an accountant should be a trusted business advisor as well as a bean counter – and for contractors, IR35 knowledge is a must-have. With various accreditations and qualifications available it’s incredibly easy to see if an accountant is IR35-savvy.”
Our previous article ‘Does Your Contractor Accountant REALLY Look after You’ sparked a number of responses regarding additional services accountants can offer contractors, and it was unsurprising that IR35 was the main talking point. IR35 compliance audits, updates and advice were a popular request from readers, again showing that accountants that claim ‘IR35 expertise’ should not do so lightly.