Individuals, companies and IR35

Introduction

IR35 legislation took effect from 6 April 2000 and is designed to bring the tax paid on certain contracts in line with the tax paid by employed staff.

IR35 may apply when you, as an individual, provide your services to a client through an intermediary. For example, if you set up a partnership or a limited company, your client contracts with the company rather than with you. This includes where your business contracts with an agency to supply your services to a client.

HM Revenue & Customs asks the following key question about this kind of arrangement: "If the partnership or limited company did not exist in this arrangement, would your work for the client business appear to be one of direct employment?" If the answer to this question is yes, then IR35 rules may apply.

Subjects covered in this guide

• Introduction
• Do the rules apply to me?
• Get an expert opinion
• My contract is within IR35 - what should I do next?