This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
IR 35
IR 35
More and more temporary workers are finding themselves inside IR35 – meaning that contracting through a personal service company (PSC) is no longer financially beneficial. As a result, many are deciding to use umbrella companies for their payroll as its deemed an easier way to get paid.
What is IR 35?
IR35 legislation was introduced to stop ‘disguised employees’ taking advantage of tax breaks. It was found that many contractors working through a LTD were operating the same as if they were a permanent employee meaning they could pay themselves both a salary and dividends.
Inside or Outside?
Inside
You are working the same way as a permanent employee and your fee payer is making deductions for you (you receive your net salary).
Outside
You are genuinely self-employed and receive your gross pay from the end client.
As of April 2017 limited company contractors are no longer allowed to determine their own IR35 status.