As a contractor how am I affected?
The company who is looking to utilise your services will decide whether you are in or out of scope of IR35.
What does it mean if I am deemed to be "inside" IR35?
If the client has determined your status as "inside" IR35 for an assignment, this means that your Tax and National Insurance contributions will be deducted from your GROSS payment and submitted on your behalf, leaving you with the NET amount.
But how does it work if I am a Limited Company and deemed to be "inside" IR35?
You have three options:
1. You can continue to operate through your limited company but you will take a "deemed" salary and an accurate PAYE tax and NI deduction will be calculated (don't forget - Employers NI will also have to be accounted for) and submitted to HMRC on your behalf, either through an Agency or an Umbrella service.
2. You select an Umbrella Company and are paid under their PAYE payroll facility
3. Work through an Agency who offer an in-house PAYE facility
What does it mean if I am a Limited Company and deemed to be "outside" IR35?
In short, nothing changes for you. You will receive GROSS payments and it is your responsibility to make your own Tax and NI contributions.