IR35 legislation is an attempt by H.M. Revenue and Customs to tax a freelancer or contractor trading through his/her company as though they are an employee of the end client.

Your company is effectively ignored and PAYE/NI is assessed on 95% of the income. All freelancers or contractors need to be aware of this legislation as it is a potential “pit fall”.

IR35 is only relevant if it can be proved that you are a deemed employee of the end client. If it can be shown that you cannot be such an employee then IR35 cannot apply.

Proving that a worker is an employee is not the same as proving the worker is self employed, that is an entirely separate argument and not relevant to IR35. The decision whether a worker is or is not an employee is carried out by a review of the terms and conditions of the contract for services, and, the working practices.

We have extensive experience in determining employment status and to give IR35 advice and to carry out IR35 reviews.

Please be aware that In April 2020 ‘off-payroll’ rules will be extended to the private sector after being introduced in the public sector in April 2017.

Please do not hesitate to contact us should you require further information on IR35, off-payroll rules or an actual IR35 contract review.