General IR35

If you are inside IR35, your ‘fee payer’ is the party above your Limited Company (PSC) who is responsible for deducting national insurance and tax before paying you net earnings.

A Recruitment Agency is responsible for enforcing whatever decision the end hirer makes when determining a contractor’s IR35 status, and making sure their payments are processed correctly.

If you are working as a contractor then your end hirer is responsible for determining your IR35 status and ensuring that you are paid and taxed correctly based on their assessment of your employment status.

It is up to the end hirer that you are working for to assess your IR35 status. Their HR department should provide you with a status determination statement explaining your status. If you think their assessment is wrong, Brookson legal can help.

Being inside IR35 impacts the way you are taxed, since HMRC will deem that you should follow PAYE rules not limited company rules. You may therefore find your after tax earnings are lower in comparison.

This is a question that can only be answered by your end hirer. It is their responsibility to undertake an assessment that clearly tells you and HMRC whether your working relationship with them falls inside or outside of IR35.

It is the end hirers responsibility to determine a contractor’s IR35 status and provide them with a status determination statement.

Substitution, Direction and Control , Right of Substitution and Mutuality of Obligation are the principal referenced tests. When determining whether a worker is genuinely self-employed or a “disguised employee”, these key employment tests should be applied.

IR35 is a piece of government legislation created to help distinguish genuinely independent contractors from those who are essentially disguised employees.