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GLOSSARY

IR35 definition

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What does IR35 mean?

IR35 is the name used to refer to some rules which is referred to in the legislation as 'intermediaries' and by HMRC often an 'off-payroll'.

This legislation is intended to prevent people who work in what looks like an employment relationship with their client from providing services through a limited company (of which the worker will be a shareholder and director), therefore avoiding an employment relationship. Where this happens, the client will pay the company. The individual will extract profits as dividends which are taxed at a lower rate than income tax. In addition, no NIC is paid either by the individual, the limited company or the client.

This limited company inbetween the individual and the client is known as an intermediary, hence the legislation referring to intermediaries. It is possible for this intermediary to be in some format other than a limit company, but this is the most

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