The following Tax guidance note provides comprehensive and up to date legal information covering:
FORTHCOMING CHANGE: from 6 April 2020, the off-payroll IR35 regime currently applicable to public authorities will be extended to all medium and large private sector entities. For more detail on this extension, see Practice Note: IR35—off-payroll workers.
The intermediaries legislation (more commonly known as 'IR35' after the reference number of the HMRC Press Release announcing the rules in Budget 1999) applies where an individual worker provides services to an end client through an intermediary, such as personal service company (PSC) or partnership, in circumstances where the individual would otherwise:
for income tax purposes, be regarded as an employee or an office-holder of the client, and
for National Insurance contributions (NICs) purposes, be regarded as employed in employed earner's employment by the client
The intention of IR35 is to ensure that the worker's income tax and NICs liability is broadly equivalent to that of an employee, and to impose a PAYE and NICs obligation on the intermediary (ie the PSC).
However, the IR35 regime is problematic in a number of ways, in particular:
it is often far from clear whether arrangements are within or outside the IR35 regime which causes uncertainty for taxpayers
there is a significant risk of HMRC investigation and potential dispute, which can be invasive and burdensome, and extremely costly if an assessment for unpaid PAYE and NICs is
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Take a free trial
0330 161 1234