The term
IR35 is the term given to the legislation introduced on 6th
April 2000, to increase the amount of tax and class one
National Insurance paid by contractors and to remove the
contractor’s right to dividend pay.
I get my contracts through an agency, but
they say they are my 'client'.
Is this true?
This is unlikely, but not impossible. If you contract to do
work for the agency itself, such as installing a computer
system for them or roofing their building, then they will be
your client. However, if the work you do is for another
business that the agency sends you to, then that other
business will be your client for IR35 purposes.
Who does it affect?
There is a common misconception that IR35 only applies to people working in the
IT sector. This is not correct. The legislation is not targeted at any particular
occupation or business sector. It can apply in any business sector:
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Where an individual (known as a worker) provides services to another
person (known as the client). |
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under arrangements involving an intermediary (such as a company or a
partnership). |
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in circumstances such that if the contract had been made directly then the
worker would have been an employee of the client. |
Anyone who structures their working arrangements in this way could be affected by the legislation. Examples of occupations where people work through service
companies run right across the board, including medical staff, chief executives of
large plc's, legal and accountancy staff, construction industry workers, clerical
workers, press officers, night club bouncers and many others.
The rules
The rules will NOT apply if the worker receives all his/her income through an
intermediary that falls within Schedule E and class one National Insurance
contributions. This is the category you would fall into should you join Kingston UK.
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Composite and Managed Service Companies and the ‘Service Company’ legislation (IR35) More... |
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IR35: Countering Avoidance in the Provision of Personal Services More... |
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Extension of Service Company Legislation (IR35) to Domestic Workers More... |
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