IR35 refers to a tax legislation that is being put into effect by HMRC from 6th April 2020 and it has been designed to prevent tax avoidance. It’s hoped that IR35 will ensure that workers, who would usually be classed as an employee if they were providing their services directly, pay the same tax and National Insurance as employees. It applies to companies who enlist workers through an intermediary, such as a limited company or partnership, in the hope of paying less tax compared to being hired by the company directly. The main aim of IR35 is to make sure that workers aren’t avoiding tax and National Insurance by being hired via an intermediary, rather than working directly for a company themselves.


Who Does IR35 Apply To?

If you are a worker who provides services through an intermediary, you may be affected by IR35. If you are a company or client who receives services from a worker through an intermediary, you may be affected by IR35. You may even be affected by IR35 if you are an agency providing services on behalf of workers. There’s certainly no denying that IR35 is going to affect a lot of people.

Before 6th April 2020, clients and companies hiring workers are responsible for deciding their employment status. Once IR35 comes into effect, this will change. From April 6th 2020, all medium and large public sector authorities and private sector clients will be responsible for deciding whether or not IR35 applies. For workers working for small clients in the private sector, the responsibility of deciding your employment status falls to the intermediary. Though IR35 is complex, help is always available.

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