Overwhelmed? Lack of Knowledge About Tax, Compliance and IR35

Overwhelmed by tax, compliance and IR35? You're not alone. Most new UK IT contractors feel the same. The good news: you don't need to be an accountant or a lawyer to stay safe — you need a few key concepts and simple repeatable routines.

This guide gives you the essentials, avoids jargon, and shows you the practical steps to stay compliant while keeping your focus on delivery and earning.

The big picture

• IR35 decides whether you're taxed like an employee for a role.
• Your company admin is mostly calendars, folders, and habits.
• Good records beat memory. Automation beats admin.

IR35 in one page

IR35 looks at how you actually work, not just what the contract says. Outside IR35 usually means: you control how the work is done, you can send a substitute, you carry some financial risk, and you're engaged to deliver outcomes — not just provide labour under supervision.

Practical tips:

• Keep a written SoW or deliverables list; avoid day‑to‑day task tickets as your scope.
• Use your own laptop where possible; avoid client email addresses.
• Invoice by milestones or outcomes; avoid timesheets that mimic employment.

Taxes you actually need to know

• Corporation Tax: paid on company profits, filed annually.
• VAT (usually Flat Rate or Standard): quarterly returns; set calendar reminders.
• PAYE for your salary: monthly RTI submissions via payroll software.
• Self Assessment: personal tax return each year.

The trick is rhythm: a 30‑minute weekly finance slot for invoices and expenses, and a 60‑minute monthly slot for reconciliations and cash flow.

Simple compliance system

1. Open business‑only accounts: bank, accounting software, receipt app.
2. Create three folders: Contracts, Invoices, Taxes (VAT, CT, PAYE).
3. Set calendar reminders: VAT quarters, payroll, CT deadline, SA deadline.
4. Keep a risk log: IR35 evidence, SoWs, independence markers.
5. Have an accountant — review quarterly, ask questions early.

Common pitfalls to avoid

• Mixing personal and business spending on one card.
• Forgetting VAT set‑asides — keep a separate tax pot.
• Letting "employment‑like" practices creep in on outside IR35 gigs.
• Not documenting changes — evidence matters if challenged.

What to do this week

• Block the weekly and monthly finance slots in your calendar.
• Create the three folders and move your latest docs into place.
• Write a one‑page SoW for your current engagement.

You don't need to know everything. You need a clear baseline and a cadence that keeps you compliant while you focus on delivering value.