What is IR35? IR35 Explained

Will IR35 apply to all contractors?

IR35 does not apply to all contractors. To determine if IR35 applies, the IR35 status needs to be assessed. The onus for determining the status along with the tax liability depends on the size of the company to which the worker is providing their services.

More detail

IR35 does not apply to all contractors.

To determine if IR35 applies, the IR35 status needs to be assessed. The onus for determining the status along with the tax liability depends on the size of the company to which the worker is providing their services.

Where the client is a medium or large company, the company is responsible for assessing the IR35 status. Once determined, the contractors will be told the firm's opinion regarding their IR35 position. This will either be that they are working "inside IR35" (subject to the legislation) or "outside IR35" (not subject to the legislation).

Contractors working for small companies must consider their status and are responsible for processing their taxes according to the IR35 status they conclude.

If the contractor's engagement meets the criteria for being an employee, IR35 will apply. But if the contractor is deemed genuinely self-employed, IR35 will not apply, and they will be considered "outside IR35".

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