IR35 is properly known as the Intermediaries legislation and came into force in April 2000 as part of the Finance Act. It set out details of new legislation relating to intermediaries (including personal service companies or other companies or partnerships). Since then IR35 has been used to determine how an individual working via a personal services company should be taxed. It had a significant impact on the interim market at the time and continues to do so.
The most recent changes to IR35 were introduced in April 2017. These changes to IR35 legislation will affect those operating in the public sector. From April 2017, liability for determining whether an individual working via a Personal Service Company is in or out of scope of IR35 will transfer “to the body paying the worker’s company” and there is now a digital tool to help determine whether a contractor is ‘inside’ or ‘outside’ IR35.
We have worked tirelessly communicating your concerns to government behind the scenes, trying our best to limit the impact of these changes and seek clarity.
We will continue to make the case to government that the employment status tool is not fit for purpose and changes in their current form will have a detrimental impact on affected businesses.
Please get in touch to share your experiences of the impact of this legislation on your business, clients and candidates as this help us to continue to bring your concerns to HMRC.
For detailed info on IR35, please visit the REC’s legal guide.