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Being classed as self employed or employed, IR35 etc

Hi all

I am currently employed by a company where i work part time and self employed as i am registered as a sole trader for the freelance work i do. I have been doing some freelance work for a small design agency run by one woman who does most of the work herself. She has now asked me to become more involved and take over a large part of the design duties. She wants me to do this on a freelance basis still but my worry is that i will have problems with the tax office if a lot of my freelance income is coming from one place. I know there's the whole IR35 thing and they can try and class you as employed in certain circumstances which i don't want. Does anybody know how they decide if they want to class you as employed or self employed? Every site i look on seems to say different things and i don't really understand the IR35 rules, they don't seem to be very clear. I will still be getting some freelance work from other sources but this will probably make up the majority. A friend of mine seems to think that if 50% of your work comes from one place they will question self employment, has anyone experienced that?
Thanks in advance.
Hi, I'm still fairly new here but I am familiar with your situation as I myself am in a similar one.
I work part-time (4 days) and freelance the rest. I am registered self-employed. I was told by my accountant that it doesn't matter if you only do a little or a lot of work freelance. The HMRC will class this as self-employed even if more of your income comes from the main job (or at least that is what I was told.)
Because I'm self-employed, I tell the HMRC about my earnings on top of my regular wage at the end of each financial year. They then decide how much tax you need to pay (or in most cases, how much they owe you!) So if you've been paying more tax than you should, the HMRC will rebate you as and when expenses are written off. Like travel to a client, purchases for the business, phone bills, even utilities.
I got so lost with this all I decided to find a small home-based accountant. It's so much easier just keeping track of income and expense in a simple spreadsheet, and then having her send all the docs to the HMRC and ensuring I get as much back as possible. Everyone will have their own way of working. Some can manage without an accountant, but it's a consideration.
Hey IDesign, thanks for your response. Maybe i didn't explain myself very well but i think you've misunderstood my question!
Ignore the fact that i am employed for a minute as i don't think thats relevant. Basically if i am a self employed freelancer but i start doing most of my freelance work for one company, will the HMRC try to claim that i am an employee of that company (this os the whole IR35 thing that i am unsure about)? What are the boundaries and criteria?
Ah sorry - my mistake :)

In that case I'm not sure. I guess that if it's work on a freelance basis it's no different to other freelance work you do maybe... Sorry I can't be of more help. The HMRC are a pain when it comes to giving a straight forward answer.
No worries! I think it does become different at a certain stage.. this is what this whole IR35 thing is.. to stop people avoiding tax if they are really employed by someone. Guess i'll have to waste some of my day on hold to the tax office tomorrow.

Looking forward to seeing your site iDesign!

Paul Murray

Staff member
I hate the HMRC site, everything's written in water-tight legal jargon.
As long as you declare everything you're earning and keep a record of where it's coming from, I wouldn't imagine you'd have a problem, at least not for the time being.
Best thing to do is give HMRC a ring and ask them directly.