Intermediaries Legislation (more commonly known as IR35) was established to deter the avoidance of tax and National Insurance Contributions (NICs) through the use of intermediaries. IR35 focuses on ‘disguised employees’, or contractors whose relationship with the end client they are providing services to would be the same as if they were on the end client’s payroll.
Before the introduction of IR35, an individual could avoid being taxed as an employee by providing his or her services through an intermediary, thereby ‘disguising’ as a contractor instead of declaring him or herself as an employee. IR35 came into effect on 6th April 2000 to deter this form of disguised employment.
If you are a contractor, you may be at risk of being classified as falling foul of IR35. Factors that suggest a breach of IR35 include:
These are the main points covered in an IR35 assessment, but there are many other elements that are taken into consideration.
Just Accountants can put you in touch with accountants who will be able to advise you on the best preventive methods for your individual case, and help protect your independence as a contractor. Contact us to receive up to 4 accountant recommendations for free.