HMRC estimates that up to a third of workers operating via a personal services Ltd Company are incorrectly classifying themselves, leading to projected economic losses to the UK Treasury of approximately £1.2bn per annum.

In order to combat this, they are tightening up the rules on IR35.

Essentially the fundamental tenant remains: Any individual deemed ‘inside’ IR35 (who is therefore considered to be operating in the same way as an employee for tax purposes, rather than on a self-employed or consultancy basis) must pay income tax and NIC contributions.  Any individual deemed ‘outside’ IR35 is classed as providing a genuine business to business service and is therefore not subject to the same tax treatment as employees.

However, whereas historically it has been the contractor who has decided if they fall within IR35, it is now the end client who now has the legal responsibility.

Having rolled out a similar initiative in 2017 in the Public Sector, it is now the turn of the Private Sector.

We have provided a range of information, some in conjunction with Socium, our sister company.

Above all, if you are uncertain about any of this, please reach out to us and also seek independent advice.

IR35 Updates

IR35 – what happened in the public sector

Check employment status for tax (CEST)

IR35 - The basics

Pros & Cons of IR35


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