Can invoice finance help your IR35 position?

Legal, Money

The savvy freelancer always keeps an eye on his or her IR35 position (well, if they’re incorporated, that is), and we’ve seen some curious suggestions for enhancing your status in the past. Now invoice finance firm UC Finance have come forward with a new suggestion taken straight from the IR35 rulebook.

By using an invoice finance solution, whereby you borrow money against your invoices, you are effectively raising corporate finance. Can this help enhance your self-employed status? Well, according to HMRC’s own employment status page:

“Individuals who risk their own money by, for example, buying assets needed for the job and bearing the running costs and paying for overheads and large quantities of materials, are almost certainly self-employed.”

So the answer appears to be yes. The initiative is also supported by QDos, who are the consummate experts in all things IR35.

Of course you will be surrendering a small amount of your earnings to your invoice finance provider, but on the plus side you’ll be getting paid a lot faster and shoring up your IR35 position if you are selected for one of HMRC’s new-and-improved employment status tests. As we all know, payment times are getting longer and longer and banks are often refusing to lend, so a dash of invoice finance could be just what the cashflow doctor ordered!

Photo by Dave Dugdale