Understanding IR35

What is IR35?

IR35, also known as ‘intermediaries legislation’, or ‘off-payroll working legislation’, is tax legislation which seeks to ensure no tax advantage is gained by disguising employment.

Changes from 6 April 2020

IR35 rules themselves are not changing but the administration of IR35 is. The changes are limited to large and medium sized enterprises that engage contractors through PSCs.

From April 2020, the responsibility for determining a contractor’s IR35 status will transfer to the end-user, with the liability shifting to the ‘fee-payer’ in the supply chain.

The end client will have to issue a Status Determination Statement to the contractor, which makes their IR35 status clear (inside or outside the rules) and explains why.

If determined to be “within IR35”, worker is deemed to be employed for tax purposes. The fee payer will be responsible for processing and paying PAYE/NIC to HMRC.

Not sure what all this means? Ipse's guide to IR35 covers everything in greater detail, from determining IR35 status, ensuring compliance and checking employing status for tax. Check it out here: https://www.ipse.co.uk/ir35-hub-ipse/guide-ir35-from-ipse.html

For any IR35 related questions, contact the Talmix Support Team (support@talmix.com)

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