The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
Many people supply their services to clients, not directly as a self-employed person, but via a company. The tax and NIC advantages of this way of working are significant ― see the Introduction to personal service companies guidance note. For the rules generally, see the Personal service company rules guidance note.
Since April 2000, anti-avoidance legislation, known as ‘IR35’, catches individuals who would be employees of their clients if they had not used a service company. Since April 2017 similar anti-avoidance rules apply to individuals who would be employees of public sector bodies if they had not used an intermediary and these rules will be extended to large and medium businesses in the private sector from 6 April 2021, deferred from the original commencement date of 6 April 2020, see the Where are we now with personal service companies? guidance note for more details.
The provisions also apply to individuals who are an ‘office-holder’ of the client and the services they provide relate to the duties of that office.
In UK legislation, an employee is defined as “an individual who has entered into or works under... a contract of employment” with ‘contract of employment’ defined as “a contract of service or apprenticeship, whether express or implied”.
This is as far as legislation goes. Therefore, the characteristics of employment are dependent on case law concerning the definition of a “contract of service”. The authority on this is widely seen as
**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.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login