IR35 and how it affects you
IR35, is a piece of legislation, which came into force in April 2000 to tackle the avoidance of employment taxes by those who work through intermediaries or limited companies (often, but not always, their own personal service companies).
IR35 and how it affects you
IR35, is a piece of legislation, which came into force in April 2000 to tackle the avoidance of employment taxes by those who work through intermediaries or limited companies (often, but not always, their own personal service companies).
IR35 FAQ's
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What is IR35?
IR35 is a piece of tax legislation which allows the government to recover employment taxes from businesses using contractors, intermediaries or limited companies. It applies where individuals working for a business are working as “disguised employees”, for example, being engaged and paying tax on a self-employed basis but under terms and conditions that would suggest that they are actually employees. In such circumstances, they would be benefitting from the tax efficiencies of self-employment and not paying the tax that an employee would be required to pay.
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Where has the concept of IR35 emerged from?
IR35 came into force in April 2000 in response to an increasing number of individuals providing contract services to the client via their own personal service companies (PSCs).
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What is happening in April 2021?
IR35 legislation is changing for those engaged by a medium or large client in the private sector. The legislation provides that the burden of making a determination of employment status will shift from an intermediary (usually a PSC) to medium and large clients that are using the services of the intermediary. Once a decision has been reached as to status, the end user client must confirm this by providing a “Status Determination Statement” (SDS) to the contractor and any agency or other provider in the supply chain.
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How do I know if my business will be impacted?
If you are a medium or large business and use self employed contractors, flexible workers or intermediaries to manage the supply of your labour then it is likely that these changes will impact your business. Likewise, if you are a recruiter or intermediary in the labour supply chain they are likely to impact on your business.
