The term IR35 relates to legislation intended to apply a PAYE and NIC charge on earnings from a company or partnership which is termed an 'intermediary' by the rules.
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For many years, people leaving jobs to become self-employed were advised to instead set up one man companies to provide their services; offering the security of a limited liability company and significant national insurance savings. We offer a brief introduction into IR35.
The IR35 rules aim to catch anyone who, by placing an intermediary between himself and his employer, gains some tax (including National Insurance Contributions) advantage.
If you have established that some of your work will be caught by IR35 and that PAYE tax and National Insurance will have to be accounted for on a deemed salary payment at 5 April 2013.
In this series of IR35 guides you will be able to consider the impact of IR35 and the effect it has on those workers providing their services through intermediaries.
The legislation known as IR35 is intended to tackle the avoidance of tax and national insurance contributions through the use of intermediaries such as service companies or partnerships.
There are special tax rules affecting the construction industry, which are designed to ensure that tax is paid by workers in the sector whether they are employed or self employed.
HM Revenue & Customs charges interest on underpayments of tax, and pays interest (repayment supplement) on overpayments. The rate of interest paid on overpaid tax is lower than the rate charged on underpayments, and interest rates are adjusted frequently in line with commercial interest rates.
