IR35
IR35 HUB
Understanding off-payroll working rules
According to Statista ‘’ As of March 2024, there were around 4.25 million self-employed workers in the United Kingdom.’’ (UK self-employment figures 2024 | Statista). As the IR35 reforms continue to reshape the contracting landscape in the UK, it's crucial for contractors and businesses alike to stay informed. Introduced in 2000, IR35 is a set of off-payroll working rules designed to help people working through personal service companies with the taxation. The aim is to ensure that companies, intermediaries, and independent contractors pay the right amount of employment taxes.
What is gov.uk’s definition of contractors?
According to Gov.uk, ‘’Contractors'' can:
- be self-employed
- have the employment status of a worker
- have the employment status of an employee if they work for a client and are employed by an agency’’
The IR35 employment status indicators are the following:
1. Right of Substitution
2. Mutuality of Obligations
3. Control
When does IR35 apply?
IR35 applies if a worker delivers services through their own intermediary (usually a limited company, often known as a PSC).
The responsibility of determining whether the worker is employed for tax purposes depends on whether the client is:
- in the public sector
- in the private and voluntary sectors
- is a small business
If you would like to find out more about being Inside or Outside IR35, please complete the form to download our guide below.
