IR35 is the common reference for the “Off Payroll Working” legislation that HMRC uses to decide if a contractor is using self-employment status to unfairly minimise their tax liabilities.
Any contractor working through a personal service company, but undertaking work which would normally be undertaken by an employee will be impacted by the changes in this legislation.
There are three different types of people in your business 1. Employee 2. Worker 3. Self-employed
If an individual is an employee or worker they will pay full tax and NIC as well as being entitled to certain benefits, such as a pension.
If an individual is genuinely self-employed the hiring company must assess their criteria as defined by HMRC in their revised IR35 legislation.
Failure to do so will result in both the individual and the company falling fowl of HMRC rules.
