Government imposed the Intermediaries Legislation, or IR35 in April 2000 to close a ‘loophole’ within the UK tax system whereby workers could set up a limited company in order to pay less tax. HMRC are targeting contractors who are ‘deemed as employees’ but are engaged on a selfemployed basis, meaning that their wages should be treated as PAYE.
However, some contractors who are genuinely using a limited company structure have also been targeted by HMRC. Don’t despair! GIFCO is on hand to ensure you are fully IR35 compliant and will guide you through the process.
In April 2017 and then 2021, the IR35 public sector reforms were implemented, and it means that it is no longer the sole responsibility of the contractor to check compliancy. It is dependent on who the individual is contracting for. However, as specified within the reforms, responsibility lies with the contractor if employed in the private sector, or if the contractor is classed as a small company through the Companies Act of 2006.