IR35 is the Intermediaries Legislation
The Intermediaries Legislation (IR35) was introduced on 6th April 2000. HMRC state that the aim of the legislation is to eliminate the avoidance of tax and National Insurance Contributions (NICs) through the use of intermediaries, such as Personal Service Companies or partnerships, in circumstances where an individual worker would otherwise:
- For tax purposes, be regarded as an employee of the client; and
- For NICs purposes, be regarded as employed in employed earners employment by the client.
The legislation is in place to ensure that freelancers and contractors running their own limited company do so with the same level of risk, liability, responsibility and control of other directors of limited companies.
For more detailed information on IR35 legislation please visit the following link: http://www.hmrc.gov.uk/ir35/