IR35

What is IR35?

IR35 is the short name used for the ‘intermediaries legislation’, which is a set of tax rules that apply to you if you work for a client through an intermediary – which can be a limited company or “personal service company” which is how many contractors operate.

 

If you are caught within the legislation then you can expect to pay about 25% more in tax every year, so you want to try and ensure that it does not apply to you!


We operate a PAYE umbrella scheme where all our employees are deemed to be working within IR35 and under the supervision, direction and control of the end client. As such their whole income is subjected to all applicable statutory deductions that include:

  • PAYE Tax

  • NI Contributions (including Employer NI)

  • Apprenticeship Levy

  • Pension Contributions

  • Holiday Pay

  • Student Loan Repayment, and

  • Any other statutory deductions required.

All net wages due to you as the worker are paid into your personal UK based bank account in GBP (Pound Sterling).

 

This means you cannot be paid by us via your limited company or personal service company, we will pay you as our employee.


However, if you are a genuine professional contractor, freelancer, interim or consultant who is in business on your own account, you should have nothing to fear from IR35. You need to find out from your agency if your working arrangements are outside IR35 and they will advise you accordingly. This is so long as you take the time to understand how the legislation works and apply best practice to ensure it does not apply to you, and have a defence prepared if investigated by HMRC.

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