What is IR35?

You may find yourself wondering 'what is IR35?' IR35 is a term that scares most contractors. It stems from a piece of tax legislation which is commonly known as the ‘Intermediaries Legislation’. The aim of IR35 by HMRC is to ensure that ‘disguised employees’ pay the same tax as if they were an employee. Genuine companies in business in their own right are deemed to be ‘outside’ of IR35 and are not penalised, whereas disguised employees are said to be ‘inside’ of IR35 and must pay the relevant taxes and National Insurance Contribution (NIC) payments accordingly.

IR35 Introduction

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