IR35 relates to legislation and rules intended to apply a PAYE and NIC charge on earnings from a company or partnership which is termed an "intermediary."
For many years, people leaving jobs to become self-employed were advised to instead set up one man companies to provide their services; offering the security of a limited liability company and significant national insurance savings. We offer a brief introduction into IR35.
The IR35 rules aim to catch anyone who, by placing an intermediary between himself and his employer, gains some tax (including national insurance contributions) advantage.
There are several ways you can avoid IR35, although they may not be palatable to you or your customers.
If you have established that some of your work will be caught by IR35, PAYE tax and national insurance will have to be accounted for on a deemed salary payment at 6 April 2020.
In this series of IR35 guides you will be able to consider the impact of IR35 and the effect it has on those workers providing their services through intermediaries.
The legislation known as IR35 is intended to tackle the avoidance of tax and national insurance contributions through the use of intermediaries such as service companies or partnerships.
The responsibilities for deciding when IR35 applies have changed for contractors engaged by or for the public sector.
There are special tax rules affecting the construction industry, which are designed to ensure that tax is paid by workers in the sector whether they are employed or self employed.
HMRC charge interest on underpayments of tax, and pays interest (repayment supplement) on overpayments.