Definition of IR 35

The 'IR 35' legislation on the provision of services via an intermediary applies where a person (the worker) is made available to work for another person (the client) by a third party (the intermediary), and where the worker would have been an employee rather than an independent contractor if he or she had worked under a direct contract with the client.

In most cases the intermediary is the worker's own limited company. Very broadly, the legislation puts such workers in the same position for income tax and national insurance purposes as they would have been in if they had been an employee of the client. The legislation was introduced in 2000 and is referred to as IR 35 because it was first announced in an Inland Revenue (now HMRC) press release numbered IR 35 issued at the time of the 1999 Budget. See also managed service companies. [1]

FT Articles & Analysis

No articles are associated with this term